India’s primary market in 2025 stood out as one of the most active years in recent history. At the same time, it marked a transition from unchecked enthusiasm to rational participation. High issuance volumes coexisted with sharper investor scrutiny, creating a market defined by both scale and selectivity.
This research note reviews issuance trends, demand patterns, listing performance, and investor sentiment, while outlining expectations for 2026.
Market Activity Snapshot
Mainboard IPO activity accelerated meaningfully during the year.
- 106 mainboard listings, up from 93 in 2024
- ₹1.83 lakh crore raised through mainboard issues
- 260 SME listings from January till date
- ₹12,210 crore mobilised via the SME platform
Together, these numbers positioned 2025 among the most active IPO years India has seen, reflecting both issuer confidence and sustained capital availability.
Issuance Mix and Demand Patterns
Fundraising leadership came from a diversified set of sectors.
- Automotive
- Consumer discretionary
- Industrials
- Financial services
- Technology
However, the defining trend was not sectoral dominance but investor behaviour.
Mainboard IPO subscriptions increased to 29.2x, up from 25.3x in 2024. Despite this rise, retail participation cooled to 7.7x, largely due to valuation concerns. Investors demonstrated greater price sensitivity, even amid strong headline demand.
The SME segment moved in the opposite direction.
- Average subscription: 69.6x
- HNI demand: 186x
While robust, this still represented moderation compared to last year’s 175x overall subscription and 427x in the HNI category. SMEs increasingly emerged as the preferred high-risk, high-reward segment, with participation peaking during Q2–Q3 and in September.
Listing Performance and Market Separation
Listing-day gains in 2025 marked a clear departure from 2024’s exuberant debut performances.
- Mainboard IPO average listing gains: 9.06%
- SME IPO average listing gains: 11.23%
Both figures were materially lower than the previous year. By August, nearly 30 SME issues and nine mainboard IPOs were trading below their issue prices, reinforcing the market’s tighter stance on valuations.
A clear size-based performance divergence emerged.
- IPOs below ₹2 billion delivered average gains of 37%
- Issues above ₹50 billion generated 29% gains
This size-performance gap became one of 2025’s most defining characteristics, with smaller offerings consistently outperforming large-ticket listings.
Standout Moment: The LG Electronics Frenzy
One IPO dominated market discussions throughout the year.
LG Electronics recorded bids worth ₹4.4 trillion, the highest-ever bid amount for a domestic IPO in India.
Key highlights included:
- Overall subscription: 54x
- QIB subscription: 166x
Retail participation faced near-impossible odds, with allocations largely decided through lottery systems. This pattern repeated across several high-demand issues, underscoring intense institutional competition for quality names.
Sentiment and Market Behaviour
Despite ample domestic liquidity, sentiment remained measured.
Key influences included:
- Global macro headwinds
- Persistent FPI outflows
- Valuation resistance
- Rising share of OFS-led IPO structures
At the same time, steady SIP inflows and a growing domestic institutional investor presence ensured that demand broadly kept pace with supply. The result was a balanced market where pricing discipline prevailed over momentum-driven excess.
Overall Assessment of 2025
The year can be characterised by:
- High issuance volumes
- Rational pricing behaviour
- Clear performance differentiation
- SME dominance in participation
- Stronger returns from smaller, sensibly valued offerings
Rather than broad-based euphoria, 2025 rewarded selectivity and fundamentals.
Outlook for 2026
Looking ahead, 2026 is expected to be a stronger year for Nifty compared to 2025.
Several policy-driven tailwinds are likely to gain traction:
- GST-related structural benefits
- Growth impulse from rate cuts implemented in 2025
- Revised tax structure with zero tax up to ₹12 lakh under the new regime
These factors should support consumption and household spending.
We also expect H2 performance to outpace H1. While 2025 largely represented consolidation and correction, 2026 appears positioned for a growth rebound. Improved foreign inflows may emerge as global quantitative tightening pauses and easing cycles potentially resume.
Additionally, the upcoming Union Budget is expected to provide greater room for infrastructure and capital expenditure. This follows moderation last year due to a temporary dip in tax collections. A renewed fiscal push could further strengthen the investment cycle through 2026.
Conclusion
India’s IPO market in 2025 balanced scale with discipline. Record listings were matched by discerning investor behaviour, clear valuation filters, and differentiated performance outcomes. As policy tailwinds and macro stability improve, the foundation laid in 2025 positions the primary market for a potentially stronger and more sustainable 2026.
