India's IPO market is experiencing a significant surge, fueled by strong investor confidence and a deadline for key financial disclosures. Several companies are rushing to tap the equity markets before the regulatory changes take effect. This flurry of activity marks a sharp contrast to the more subdued IPO landscape seen earlier in the year.
This resurgence is attributed to a number of factors, including easing concerns over potential US tariffs and robust investment flows into mutual funds, which subsequently find their way into IPOs and institutional investments. The improving economic growth, favorable market conditions and improvements in the regulatory framework have also contributed to companies raising record amounts in 2024, setting the stage for another landmark year.
According to research firm Prime Database, IPOs worth an estimated $30 billion from 161 companies have already been approved or are currently under review by India's market regulator. These companies represent a diverse range of sectors, including finance, clean technology, construction and retail. Some of the larger IPO candidates include the Indian unit of LG Electronics, aiming to raise $1.7 billion, and lender Tata Capital, targeting a $2 billion listing.
July 2025 witnessed a particularly vibrant IPO market, with 45 companies going public, consisting of 13 mainboard IPOs and 32 SME IPOs. Many of these IPOs were significantly oversubscribed, demonstrating the strong demand across various sectors. For example, GNG Electronics' IPO was oversubscribed by more than 150 times and listed at a premium of nearly 50% on July 30. HDB Financial Services, with an issue size of ₹12,500 crore, was oversubscribed by over 16.6 times.
The surge in IPO activity also reflects the increasing participation of retail investors in India's capital market. The number of demat accounts, which are used to hold securities for digital trading, has surged to 171 million as of August 31, from 41 million in March 2020. This growth is attributed to better awareness, a global trend towards financialization of savings, and stock market investments offering more attractive returns compared to debt and other asset classes.
However, some experts urge caution, noting that valuations and investor demand for public listings have not yet returned to their previous highs. For the IPO market to regain the levels of excitement seen in 2023 and 2024, a renewed surge in equity market enthusiasm is needed. Investors are advised to focus on fundamentals and long-term growth potential when considering IPO investments.
Several IPOs are already making headlines. For instance, the NSDL IPO, which closed on August 1, was oversubscribed 41 times, with strong demand from all investor segments. The grey market premium (GMP) for NSDL shares suggests a listing price significantly higher than the IPO's upper price band. M&B Engineering is also set to launch its IPO, with expectations of a mild premium.
Despite the overall positive sentiment, some IPOs have experienced mixed performance. While some have delivered substantial returns, others have listed at a discount or experienced a decline from their issue price. This highlights the importance of thorough due diligence and careful selection when participating in the IPO market.
