Indian companies have raised more funds through Initial Public Offerings (IPOs) in the last five years than in the previous two decades combined, signaling a vibrant and maturing equity market. This surge reflects strong investor confidence, a robust regulatory framework, and a consistent pipeline of new listings across diverse sectors.
Between 2000 and 2019, Indian companies collectively raised ₹4 lakh crore through IPOs. In contrast, since 2020, they have raised ₹5 lakh crore, surpassing the total of the previous two decades. This remarkable increase underscores the rapid growth and dynamism of the Indian IPO market in recent years.
Several factors have contributed to this IPO boom. Increased liquidity, low-interest rates, and government stimulus measures, particularly during the pandemic, fueled a surge in IPO activity. Investor optimism has also played a significant role, with many investors seeking listing gains rather than long-term ownership. This trend is evident in the oversubscription rates of many IPOs, with investors often willing to queue for single-digit returns, hoping their luck will defy probability.
The National Stock Exchange (NSE) has emerged as a leader in IPO listings, with a significant increase in the number of companies going public. In 2024, 268 IPOs were listed on the NSE, a substantial rise from 93 in 2022. This growth contrasts with the trends in other major global exchanges, some of which have experienced a contraction in IPO activity. In 2023, India was the third-largest market globally in terms of IPO proceeds. Proceeds surged to a record USD 22.8 billion in 2024 due to 337 listings, compared to USD 7 billion in 2023 from 242 listings.
However, experts advise caution, noting that historically, IPO booms have often been followed by market corrections. While the allure of quick listing gains is strong, the odds of securing substantial profits are slim, with a significant percentage of IPOs delivering only marginal returns. Since 2000, 56% of IPOs have listing gains of less than 10%, which sometimes includes listings at a discount. Furthermore, the allotment process for retail investors in oversubscribed IPOs is essentially a lottery, emphasizing the element of chance involved.
Despite these risks, the Indian IPO market continues to attract significant attention, both domestically and internationally. The pipeline for future IPOs remains robust, with analysts anticipating the first USD 10 billion IPO in the next three to five years. So far in 2025, 71 listings have raised INR 214 billion (USD 2.5 billion). As the Indian economy continues to grow, the IPO market is expected to play an increasingly important role in capital formation and wealth creation.
