Saturday, 11 Oct, 2025
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India’s IPO rush hits a 30-year high, with at least 185 companies filing draft prospectuses with Sebi so far this year.
India’s booming market for initial public offerings is entering a decisive phase. Two of the biggest listings of the year — from Tata Capital Ltd. and LG Electronics India — are about to open for public subscription, setting the stage for what could be a record-breaking month in one of the world’s busiest IPO markets.
Together, the offerings could push October’s IPO proceeds beyond Rs 42,000 crore ($5 billion), a milestone that underscores both investor enthusiasm and the sheer scale of India’s capital markets. Yet the timing is telling: companies are rushing to raise funds even as the broader stock market shows signs of fatigue.
Fundraising rush amid cooling markets
The momentum in India’s IPO market stands out globally. By the end of the third quarter, companies had raised about Rs 93,000 crore ($11.2 billion), making India the fourth-largest IPO market after the United States, China, and Japan, according to Bloomberg data. That follows a record Rs 1.75 lakh crore ($21 billion) raised last year.
Tata Capital’s Rs 14,100 crore ($1.7 billion) issue, the biggest since Hyundai Motor India’s Rs 27,500 crore ($3.3 billion) sale in 2024, offers investors a slice of the country’s most respected conglomerate. The IPO has already attracted heavyweight anchor investors including Morgan Stanley, Goldman Sachs, and major domestic mutual funds.
LG Electronics’ offering, meanwhile, taps into the consumer boom in India. Its listing will give investors exposure to the expanding middle class and the surge in demand for home appliances, electronics, and automobiles—a sector that has come to define the post-pandemic growth story.
These listings come as the Nifty 50 index has risen only 5 per cent this year, a sharp contrast to a 23 per cent gain in broader Asian markets. Concerns over slowing earnings growth and trade frictions with the US have dampened sentiment, making the upcoming IPOs an important test of whether investor optimism is still holding up.
Record filings signal market maturity
The surge isn’t limited to marquee names. At least 185 companies have filed their draft red herring prospectuses (DRHPs) this year—the highest number since 1996. The drivers of this wave are deeply structural. Retail participation in the country’s stock markets has exploded, with household savings increasingly channelled through mutual funds. Monthly inflows into systematic investment plans—small, regular stock investments by individuals—have reached Rs 20,000 crore (about $2.4 billion), giving fund managers a steady source of liquidity.
Market analysts say this shows how deep and confident India’s domestic capital has become and even smaller firms from second- and third-tier cities are now seeking listings—something unheard of a decade ago.
The Securities and Exchange Board of India (Sebi) has also made it easier for large private firms to go public, while the Reserve Bank of India (RBI) recently relaxed lending rules for investors participating in IPOs. Together, these moves have lowered barriers to entry and accelerated fundraising.
Lessons from past listings
Still, the past offers a note of caution. Several of the biggest IPOs have stumbled after listing. Hyundai Motor’s shares fell more than 7 per cent on debut last year; the Life Insurance Corporation of India’s 2022 listing dropped 8 per cent on its first day; and Paytm’s much-hyped 2021 debut tumbled 25 per cent.
That history looms large as Tata Capital and LG Electronics prepare to hit the market. Both are strong brands with solid fundamentals, but sentiment can turn quickly if there’s a global shock or a selloff in local equities, say experts.
The bigger picture
Beyond stock performance, the IPO boom marks a structural shift in India’s financial landscape. Traditionally, corporate India has relied on banks for financing. Now, more firms—from industrial stalwarts to digital start-ups—are turning to public markets to raise long-term capital.
Economists say this shift is crucial for the world’s fastest-growing major economy. With household wealth increasingly invested in equities, the IPO pipeline helps absorb liquidity and channel savings into productive enterprises. To prevent overheating, India needs around Rs 2 lakh crore of new share issuance each year.
If the trend continues, 2026 could be another record year, with high-profile startups such as PhonePe, Meesho, Lenskart, and PhysicsWallah lining up for their own public debuts.
Confidence meets caution
For now, the IPO surge reflects confidence in India’s growth story—a country where consumer spending is strong, domestic capital is deepening, and entrepreneurs from small towns see markets as a path to scale. Yet it also hints at fragility. With earnings growth slowing and geopolitical tensions rising, the rush to go public may be as much about locking in high valuations as it is about optimism.
The coming weeks will be decisive. The performance of Tata Capital and LG Electronics will set the tone for what follows—not just for India’s IPO pipeline, but for how global investors gauge the staying power of one of the world’s most dynamic emerging markets.
