India sees fourth largest fund raise globally via IPOs in 2025

Indian markets witnessed the fourth largest fund raise via the initial public offer (IPO) route in calendar year 2025 (CY25) at $14.2 billion, according to an analysis by Bernstein. The US at $52.9 billion topped this list, followed by Hong Kong ($23.4 billion) and China (16.2 billion). CLICK HERE FOR A DETAILED GRAPHIC

 

In rupee terms, as many as 74 companies have raised Rs 85,241.08 crore from the primary markets in CY25, excluding the three big IPOs (WeWork India, Tata Capital and LG Electronics India) that opened for subscription in the past few days and aim to raise close to Rs 30,000 crore. 

 

Primary market mop-up in CY25 in India is the third highest amount raised in the country in the last five years, according to data, next only to Rs 1,59,783.76 crore raised via 91 offers in 2024 and Rs 1,18,723.17 crore raised in 2021 via 63 offers.

 

FII pull out

 

The IPO activity in India, Bernstein said, assumes significance as the markets have seen foreign institutional investors (FIIs) pull out nearly $18 billion in the secondary markets this year, but have invested $5 billion in the primary markets.

 

This, it said, is in sharp contrast to the equity market performance, where India lags all major economies with almost zero returns in US dollar terms year-to-date (YTD). 

 

“Clearly, we’re seeing a distinction being made between the primary and secondary markets,” wrote Venugopal Garre, managing director and India head of research at Bernstein in a coauthored note with Nikhil Arela.

 

Beating the Street

 

A review of 161 companies that listed since January 2024, Bernstein said, highlights that investing in these new offerings has generally outperformed broad market indices: these stocks have beaten Nifty returns in five of the last seven quarters, with 61 per cent of these outperforming the broader Nifty index in the last 6 months.  

 

 

Listing gains, on average, came in at 22 per cent, and are better than for those who held these stocks for three months or longer – where roughly half the stocks gave negative returns over the long run, the note said. 

 

Of the 161 IPOs that have listed so far over the last 21 months have delivered an average of 22 per cent listing gains, Bernstein said, with over 53 per cent of these having given double-digit gains. 

 

FII outflows, according to the report, spiked during periods of heavy IPO activity, which suggests that institutions aren’t sticking long to securities in the secondary markets once they make gains in the primary issues. 

 

Size matters

 

Among sectors, 28 (around 16 per cent) of the IPOs belonged to consumer tech, green energy or the digital sectors, Bernstein analysis suggests. 

 

“It also appears the lower the issue size, the better is the average return upon listing. For size below $20 million, we see almost 40 per cent returns, while it is 31 per cent for listings targeting $20-40 million funds. The least successful have been the over $1 billion IPOs, which have delivered only 9 per cent returns on an average," the note suggests.