Big IPOs offer bigger exits to private equity backers and promoters

Secondary share sales provide founding owners and private equity backers an orderly exit mechanism without diluting a company's equity base or expanding its share float

Promoters and early-stage investors continue to dominate the offer for sale (OFS) mix in initial public offerings (IPOs), monetising their holdings amid favourable valuations.

 

Secondary share sales provide founding owners and private equity (PE) backers an orderly exit mechanism without diluting a company's equity base or expanding its share float.

 

Data compiled by Prime Database shows mainboard IPOs raised ₹1.05 trillion across 81 issues in calendar year 2026 (CY26) to date. Of this, secondary share sales via the OFS route accounted for ₹64,225 crore, or over 61 per cent of total fundraising. Fresh capital raises comprised the remaining ₹40,334 crore. The reliance on secondary offerings mirrors trends seen in 2025, when OFS issuances accounted for ₹1.11 trillion of the total ₹1.76 trillion raised across 81 mainboard listings as of September 17.

 

The concentration of OFS expanded alongside issue sizes, led by two mega-deals. Initial public offerings (IPOs) from the National Stock Exchange, or NSE (₹21,494 crore) and SBI Funds Management (₹9,795 crore) served as secondary exits for existing shareholders, together accounting for 51 per cent of total secondary capital raised.

 

Market experts noted that secondary exits do not necessarily signal weak corporate fundamentals. Private equity (PE) investors and early backers, having supported companies through initial expansion, periodically reallocate capital by exiting mature investments to fund new ventures. Key market leaders like the NSE and SBI Funds Management remain well-positioned to expand in tandem with underlying macroeconomic growth. 

 

"Indian investors should not treat every OFS as a warning signal. PE investors usually provide risk capital years before listing, helping companies fund capacity, distribution, acquisitions, and governance. Their eventual exit is part of the capital cycle and enables money to be recycled into new enterprises", said Manish Bhandari, chief executive officer (CEO) and portfolio manager, Vallum Capital.

 

"I think we are near the peak of the cycle for every market. This kind of momentum will likely top out by March 27," said G Chokkalingam, founder, Equinomics Research.

 

“Most primary issues from 10-20 years ago were undertaken largely for business expansion and partly for debt repayment. But now, the primary market is used more for unlocking value rather than meeting capital expenditures," he added.

 

Secondary volumes in 2026 were further elevated by major listings structured heavily or entirely as OFS transactions. Additional notable deals included Clean Max Enviro Energy Solutions (₹1,883.72 crore), Fractal Analytics (₹1,808.32 crore), and Dhoot Transmission (₹1,666.56 crore).

 

Sectorally, industrials led mainboard IPO fundraising in financial year 2026-27 (FY27) to date with a 25.6 per cent share, followed by financials at 23.4 per cent, and healthcare at 20.4 per cent, according to the latest NSE Market Pulse report. Consumer discretionary accounted for 18.7 per cent, while consumer staples and utilities garnered 4.1 per cent and 3.9 per cent, respectively. The remaining capital was distributed across materials (2.4 per cent), energy (0.9 per cent), and information technology (0.6 per cent).