ECM activity dip in 2025 despite record IPO year: Kotak Investment Banking

Overall equity capital market fundraising fell in 2025 due to weak follow-on and sell-down activity, even as IPO volumes touched a record high

The overall equity capital markets (ECM) volume declined in calendar year 2025 (CY25), even as initial public offerings (IPO) boomed, said Kotak Investment Banking at its annual media roundtable.

 

The overall ECM fundraising totalled ₹5.1 trillion in 2025, down from ₹6.1 trillion in 2024, despite IPOs hitting a new high last year.

 

The decline in overall ECM mop-up was driven by lower follow-on offerings and sell-downs.

 

Follow-on includes qualified institutional placements (QIPs), follow-on public offerings (FPOs), and rights issues. Sell-down includes block deals and offer-for-sale (OFS).

 

Follow-on volumes contracted by 53 per cent in CY25 to ₹89,761 crore, against ₹1.9 trillion in the previous year.

 

 

Sell Down volumes also declined in 2025 at ₹2.30 trillion against 2024 volumes of ₹2.6 trillion.

 

In IPOs, domestic institutional investors (DIIs) emerged as demand and price leaders, accounting for an average of 60 per cent of the anchor book in 2025, up from 40 per cent in 2024. New-age technology IPOs took centre stage, posting average listing gains of 38 per cent, over 3x the average for all IPOs.

 

“Typically, the mid and large cap IPOs have done very well. There has been a better price discipline and better outcome for everyone concerned,” said V Jayasankar, managing director and Wholetime Director of Kotak Investment Banking.

  Jayasankar added that IPOs, with an issue size of above ₹3,000 crore, achieved an average listing gain of about 19 per cent, compared to 9 per cent for IPOs with smaller issue sizes.

 

“IPO activities dramatically increased in the second half, and it is something we have been noticing for a couple of years. There is greater activity in the second half. Financial institutions group, new age tech, and industrials were the sectors leading the IPO activity,” said Jayasankar.

 

Going forward, the ECM fund mop-up is expected to cross ₹6 trillion, the investment bank said.