After a slow start, India’s initial public offering (IPO) market is racing towards a tipping point in 2025, with fundraising volumes and listing activity accelerating to record levels. Per estimates, India is witnessing the fourth largest fund raising globally at $14.2 billion, only next to the US, Hong Kong and China. Some 79 companies raked in $11.5 billion in the first nine months of 2025, while the pipeline of offerings is expected to add another $10-11 billion, capping the IPO market above $20 billion in 2025, according to Kotak Mahindra Capital. The frenzy is similar to the landmark years of 2024 and 2021, when 91 and 63 IPOs raised ₹1.6 lakh crore and ₹1.19 lakh crore, respectively. With total collections set to cross ₹1.3 lakh crore, 2025 may well be remembered as the second largest year in the Indian IPO history, surpassed only by 2024’s haul.
Interestingly, the market is driven by active participation of domestic mutual funds, offsetting a wave of foreign institutional investor exits. The market is also seeing strong appetite from retail and high-networth individuals, who are participating in IPOs like never before. Sensing that the momentum is showing no signs of slowing down, the RBI has increased the IPO financing limit from ₹10 lakh to ₹25 lakh per individual investor. The raised limit, which was last revised in 1998, is expected to broaden retail participation, inject liquidity into the primary market, and deepen the capital markets. While higher fi nancing limits indicate that banks and regulators are encouraging retail participation, investors must be watchful.
Even though the extra credit limit comes in handy, what’s crucial is understanding stock fundamentals and timing. While retail investors are queuing up for new issues, FIIs are heading in the opposite direction, reflecting an overall reduction in portfolio funds to India. Moreover, even as the IPO frenzy is hitting records, India’s benchmark indices are delivering lacklustre returns. For instance, the Nifty-50 has barely turned in 6 percent so far this year, while indices tracking small- and mid-sized fi rms are yielding negative returns. Above all, estimates also suggest that about half the IPOs this year are trading below their listing prices, while only 43 of the 79 companies have given positive returns. Investors must exercise caution.
