IPO frenzy? Data shows only 1 in 4 IPOs drew Mutual Fund anchors in 2025

What Anchor Allocation Numbers Reveal About IPO Quality

India’s IPO market in 2025 is often described as “hot”, but a closer look at institutional behaviour shows something more durable at work: measured participation, disciplined capital deployment, and a decisive shift towards growth funding rather than exits. Data from Pantomath Primary Pulse 2025 shows that mutual funds have emerged as the single most important institutional pillar in India’s IPO ecosystem, but their presence is far from universal. 

 

In 2025, mutual funds participated as anchor investors in roughly 26% of mainboard IPOs.

 

A small group of large asset managers dominated anchor allocations. The top five—SBI Mutual Fund, ICICI Prudential, HDFC Mutual Fund, Nippon India, and Kotak Mahindra—together accounted for around 20% of total anchor capital deployed. Even the most active fund houses anchored fewer than 35 issues during the year, reinforcing the view that institutional capital is being deployed selectively, not mechanically. 

 

 

"Despite rising IPO activity, participation by even the most active mutual funds (top five) is limited to 28 IPOs on average, reflecting a selective, conviction-driven approach," noted the report.  Mutual Fund anchor investors in 2025 

The top five AMCs account for 20% of the total issue amount,

FPIs Add Global Validation—but Stay Disciplined

 

Foreign Portfolio Investors (FPIs) continued to lend global credibility to India’s IPO market in 2025, but their participation remained even more selective than domestic institutions. FPIs anchored only about 18% of mainboard IPOs on average, with capital concentrated among sovereign funds, global asset managers, and international investment banks.   FPI anchor investors in 2025

Fidelity, the Government of Singapore, Goldman Sachs, Norges Bank, and Abu Dhabi Investment Authority featured prominently—but even these marquee names participated in a limited number of deals. This pattern mirrors developed markets, where global capital enhances price discovery and discipline, rather than driving volumes.

 

Even the most active FPIs have participated in a relatively small number of IPOs, with overall FPI participation spanning only 18% of mainboard IPO issues on an average.

 

Why Companies Are Listing: Expansion, De-leveraging, Scale

 

Perhaps the strongest signal of market maturity lies in how IPO proceeds are being used. Data on fund utilisation shows that India Inc is tapping public markets primarily to build and strengthen businesses, not merely to provide exits. 

 

26% of IPO proceeds were directed towards expansion, new projects, and capacity creation

 

26% went towards debt reduction, highlighting balance-sheet repair

 

25% was used for working capital and operational needs

 

Strategic uses such as acquisitions, branding, and R&D formed a much smaller share, underscoring that IPOs are being treated as growth capital, not financial engineering tools.

 

This deployment pattern aligns closely with broader economic priorities—manufacturing push, infrastructure expansion, and supply-chain diversification—suggesting a tight linkage between capital markets and the real economy.

 

Financial Services Dominate—but Capital Is Not Fragmented  Sector-wise issues 

 

Sectoral data shows that financial services and investments alone accounted for nearly 30% of total IPO proceeds in 2025, reflecting the central role of NBFCs, asset managers, insurers, and financial platforms in India’s growth cycle. 

 

Importantly, fund-raising was not scattered across dozens of industries. The top 13 sectors together contributed over 80% of total issue amounts, indicating focused capital allocation rather than speculative breadth. Manufacturing, pharmaceuticals, electrical equipment, auto components, cement, and construction materials also featured strongly—pointing to sustained confidence in domestic capacity expansion.