Well-priced IPOs will build long-term market credibility: Kamraj Negi

Sustainable growth of IPO market will depend on issuer quality and the returns delivered to investors over time, said Pantomath Capital's MD & CEO - investment banking Kamraj Negi.

Expressing his optimism on the IPO market's trajectory, Kamraj Negi, MD & CEO - investment banking at Pantomath Capital, told Saloni Goel in an email interview that the pace of issuance will depend on market volatility, valuations, and the ability of companies to execute their offerings within favourable windows. He also added that a successful IPO should create value for the company and its new shareholders. Edited excerpts:

 Can some of these mega issues crowd out smaller IPOs from the primary market? 

Large IPOs such as NSE and Jio Platforms represent the growing depth of India's capital markets and their ability to absorb sizeable offerings. They also broaden investor participation and create opportunities to invest in businesses with significant scale.  

 

While mega issues can temporarily absorb liquidity and investor attention, they do not necessarily crowd out smaller issuers. Capital allocation depends on the quality of the business, pricing, sector outlook, and investor appetite. Well-positioned companies with differentiated business models and credible growth prospects can continue to attract capital alongside large offerings. The key is a balanced issuance calendar and disciplined pricing.

 

For the remainder of FY27, what is your IPO outlook? 

We remain constructive on India's primary market for the second half of FY27, although the pace of issuance will depend on market volatility, valuations, and the ability of companies to execute their offerings within favourable windows. 

The first half has already demonstrated considerable depth, with mainboard IPOs raising a record ₹94,205 crore. Strong domestic investor participation and a substantial pipeline provide a supportive foundation. However, we expect investors to become increasingly selective, rewarding issuers with strong fundamentals, sound governance, and visible earnings growth. The market is evolving from one driven primarily by liquidity to one increasingly shaped by quality and valuation discipline. 

IPO fundraising has set records over the last three years. Will the trend sustain? 

The structural drivers remain intact: a growing economy, expanding formalisation, deeper domestic savings pools, increased retail participation and a larger base of companies reaching public-market scale. 

 

FY26 saw 108 mainboard companies raise ₹1.76 lakh crore through IPOs. The momentum continued into FY27, with the first half delivering record mainboard IPO fundraising. However, record mobilisation should not be treated as a guaranteed annual outcome. Global uncertainty, market corrections and valuation expectations can influence both the timing and size of offerings.

We expect India's primary market to remain an important source of capital formation, although year-on-year fundraising may fluctuate. Sustainable growth will depend on issuer quality and the returns delivered to investors over time. 

What insights can you share about next year's IPO pipeline? How much and how many IPOs are looking to raise funds? 

Nearly 250 companies were in the pipeline to raise approximately ₹4.65 lakh crore through IPOs in the first half of October. This reflects the substantial depth of India's prospective issuance pipeline and the backlog of companies preparing to access public markets. 

The pipeline includes businesses across established sectors as well as newer segments of the economy. However, the number of companies with plans or approvals should not be confused with confirmed launches. Actual fundraising will depend on regulatory approvals, market conditions, valuation expectations, and issuer readiness. 

We expect the pipeline to provide meaningful opportunities through FY27 and beyond, with execution likely to be staggered according to market appetite rather than concentrated uniformly across the year. 

Are companies pricing IPOs for sustainable long-term returns or maximising valuations in a favourable market window? 

The market reflects both approaches, which is why valuation discipline is becoming increasingly important. Some issuers are using favourable conditions to seek premium valuations, while others are prioritising a successful transition to public-market ownership and a sustainable investor base. 

The real test is whether earnings visibility, cash-flow generation, competitive positioning, and credible growth assumptions support the offer price. Investors are also scrutinising the balance between fresh capital raised for business expansion and offers for sale by existing shareholders. 

A successful IPO should create value for the company and its new shareholders. Issuers that leave reasonable room for future performance, rather than pricing solely for immediate monetisation, are more likely to build long-term market credibility.

 

HNI participation appears stronger than retail participation. Is this a recent trend, and why? 

HNI participation has always been an important component of India's IPO market. What has changed is the relative intensity of participation across investor categories, particularly as investors have become more sensitive to valuations and listing-day returns. 

Business Standard's July 2026 analysis of 28 mainboard IPOs found an average subscription of 63.1 times in the non-institutional investor category, which includes HNIs, compared with 48.4 times for qualified institutional buyers and 12.8 times for retail investors. 

HNIs typically have greater capacity to deploy capital and may use financing or portfolio-allocation strategies, although these approaches carry risks. Retail investors, meanwhile, have become more selective amid volatility and concerns over expensive offerings. The trend reflects a maturing market in which participation is increasingly differentiated by risk appetite, liquidity, and confidence in valuations.

 

What is your five-point checklist for deciding whether to apply for an IPO? 

1. Business fundamentals: Understand the company's business model, competitive advantage, addressable market, and ability to sustain growth. 

2. Financial quality: Assess revenue and profit growth, operating margins, cash flows, debt levels, and the sustainability of earnings. 

3. Valuation: Compare the IPO valuation with listed peers, growth prospects and relevant financial metrics. A strong company is not automatically a good investment at every price. 

4. Use of proceeds and governance: Examine whether funds will support productive growth or primarily facilitate shareholder exits. Review promoter background, related-party transactions, disclosures and governance standards. 

5. Investment horizon and risk: Decide whether the investment fits your portfolio, risk tolerance, and time horizon. Do not rely solely on subscription multiples, market sentiment or unofficial grey-market premiums to anticipate listing gains. 

Ultimately, an IPO should be evaluated as an investment in a business, not simply as an opportunity to capture a listing-day premium.