India's hot IPO market is bracing for a significant test as several companies, including major players like Tata Capital and LG Electronics India, aim to raise approximately $2 billion through initial public offerings. These IPOs are poised to gauge the depth and resilience of the Indian primary market, especially amidst global economic uncertainties.
India's IPO market has been robust in 2025, ranking as the fourth largest globally in terms of funds raised. As of October 2025, Indian companies have already raised over $12 billion through IPOs, with projections estimating an additional $5 billion to be added this month. This flurry of activity is driven by strong domestic liquidity, fueled by increasing participation from retail investors and mutual funds. The Reserve Bank of India (RBI) has also increased the IPO financing limit for individual investors, signaling confidence in the market's potential and aiming to further broaden retail participation.
However, this surge in IPO activity contrasts with the performance of broader market indices like the Nifty 50, which has underperformed regional peers. Foreign investors have also been net sellers in the secondary markets, adding a layer of complexity to the IPO landscape. Moreover, reports suggest that a significant portion of IPOs listed this year are trading below their listing prices, highlighting the need for caution and careful evaluation by investors.
Several factors contribute to the current IPO boom. Strong investor sentiment, healthy corporate earnings, and India's growing appeal as a global investment destination are key drivers. Additionally, recent regulatory changes aimed at modernizing capital markets and attracting long-term foreign capital have played a crucial role. Citigroup analysts predict that India's IPO market could raise as much as $20 billion over the next 12 months, potentially making it one of the most active equity capital markets globally, alongside Hong Kong.
The upcoming IPOs from Tata Capital and LG Electronics India are particularly noteworthy. Tata Capital's IPO aimed to raise ₹15,511.87 crore, while LG Electronics India sought to garner ₹11,607.01 crore. LG Electronics India IPO received bids worth record Rs 4.4 lakh crore, 54 times the shares on offer. These offerings will test the market's appetite for large issues and the ability of domestic investors to absorb them. The success of these IPOs could pave the way for other major listings in the pipeline, including those from ICICI Prudential Asset Management, Pine Labs, Meesho, and potentially Reliance Jio.
However, some analysts caution that the sheer volume of upcoming IPOs could pose a challenge. There may be a need for "calibration around valuation expectations" to ensure successful listings. The performance of recent IPOs, where a significant percentage are trading below their listing price, serves as a reminder of the risks involved.
Several other IPOs are scheduled for October 2025, including Canara Robeco Asset Management Company, Rubicon Research, and Canara HSBC Life Insurance Company. Additionally, several SME IPOs are also expected to hit the market. These smaller offerings cater to a different segment of investors and contribute to the overall vibrancy of the primary market.
Overall, India's IPO market presents a mixed picture. While strong investor sentiment and regulatory support are driving activity, challenges remain in terms of global uncertainties, secondary market performance, and the sheer volume of upcoming issues. The upcoming $2 billion listing test will provide valuable insights into the market's true strength and its ability to sustain the current boom.
