FY25 mop up at ₹1.72 trn: Will FY26 be another blockbuster year for IPOs?

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Financial year 2024-25 (FY25) saw a total of 318 companies, comprising 79 mainline and 239 SME, raise ₹1.72 trillion in initial public offerings (IPOs), surpassing the combined total raised in the last two fiscals, FY24 and FY23.

 

Notably, the amount raised in FY25 is nearly two and a half times greater than the ₹73,628.23 crore raised in FY24 and over three times the ₹54,856.53 crore raised in FY23, data suggests.

 

The mainline segment alone, consisting of 79 companies, raised ₹1.62 trillion, which is still 26 per cent higher than the combined total of ₹1.28 trillion raised by 437 companies in FY23 and FY24 (including both mainline and SME). 

Financial Year	Total No. of IPOs	No. of mainline IPOs	Amount raised by mainlines	No. of SME IPOs	Amount raised by SMEs	Total amount raised
FY25	318	79	₹ 1,62,517.21 Cr	239	₹ 9,966.91 Cr	₹ 1,72,484.12 Cr
FY24	273	78	₹ 67,557.63 Cr	195	₹ 6,070.4 Cr	₹ 73,628.23 Cr
FY23	164	39	₹ 52,549.1 Cr	125	₹ 2,307.43 Cr	₹ 54,856.53 Cr

Analysts attribute this success in the primary markets to the remarkable performance of secondary markets for most part of FY25.   According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, there is a positive correlation between the IPO market and the secondary market. "When the secondary markets do well, the primary markets also get a rub-off effect. The boom in the Indian stock market post the Covid crash facilitated a boom in the IPO market as well," Vijayakumar added.

 

Echoing similar views, Ambareesh Baliga, an independent market analyst also feels that the secondary market sentiment has a bearing on the primary markets. Another factor investors consider, he said, is when companies go public at a decent premium.

 

“If the issue gets listed at a discount, long-term investors would prefer to buy the stocks post-listing at a cheaper price. Given the fact that some issues offered solid returns post-listing, the primary markets witnessed enthusiastic participation from investors in FY25," Baliga said.

 

Notably, the benchmark Indian equity indices, BSE Sensex and NSE Nifty50, scaled their historic peaks of 85,978.25 and 26,277.35, respectively, in September, 2024.

 

This extraordinary bullishness in the secondary markets, along with some themes like small finance banks, new-age companies, digital companies, stock market-related companies, renewable energy, and green energy, according to G Chokkalingam, Founder and Chief Investment Officer at Equinomics Research, have led to the boom in the primary market in FY25. 

Also Read: Investment guide: Where to invest in FY26? Analysts pick sectors to bet

  Will the trend continue in FY26? 

 

Market analysts remain divided on the outlook of primary markets in FY26. Notably, as many as 49 companies have already received approval from the capital market regulatory body, the Securities and Exchange Board of India (Sebi), to raise a combined total of up to ₹84,069.00 crore, according to PRIME Database data. In addition, 67 companies have filed their draft papers with Sebi to raise nearly ₹1trillion.

 

The road ahead for the primary markets in FY26, said Narendra Solanki, head of fundamental research - Investment Services at Anand Rathi Shares and Stock Brokers will largely depend on how the secondary markets play out.

 

Chokkalingam, on the other hand, said that a full recovery in the secondary markets is still awaited.

 

“A number of stocks that recently got listed are witnessing a steep correction given the overall market sentiment. While we may see companies approach the markets to list, I remain skeptical if FY26 will be a blockbuster year for the primary markets,” he said.

 

If there is a recovery in the secondary markets, and the initial couple of public issues get listed at a decent premium, primary markets, Baliga believes, could well be on course for a revival in the fiscal year ahead.