India Raises Over $21 Billion Through 370 IPOs, Median Returns Near Zero

India’s primary market reportedly saw strong activity last year, with more than 370 Initial Public Offerings (IPOs) raising over $21 billion, as per a LiveMint report.  

This placed the country among the most active global markets for listings, ranking third after China/Hong Kong and the United States in terms of funds raised. 

Rising IPO Pipeline 

The large number of public issues showed investor participation and a pipeline of companies seeking to raise capital. Several sectors, including manufacturing, consumer services and technology-linked businesses, tapped public markets during the year. 

Despite the scale of fundraising, the performance of newly listed stocks has been uneven, indicating that the headline figures do not fully reflect investor outcomes. 

Limited Gains After Listing 

India accounted for around 40% of all emerging market IPOs during the year, making it a major contributor to overall issuance in developing markets. 

However, the median return from Indian IPOs was close to zero, suggesting that most listings offered limited gains after entering the market. By comparison, the median return across emerging markets excluding India was around 22%. 

Across emerging markets as a whole, last year delivered a weighted average IPO return of roughly 53%, based on historical analysis of listings. At the same time, the median return stood at about 10%, indicating wide variation in outcomes across different offerings. 

Structure of IPO Proceeds 

The way funds raised through IPOs are used in India also differs from other emerging markets. 

In many emerging economies, about 92% of IPO proceeds typically go into the company’s balance sheet, supporting expansion plans or reducing debt levels. In India, more than half of the funds raised are often used by existing shareholders to reduce their holdings. 

It is also common for companies to return to the market within a few years through follow-on offerings to raise additional capital. 

Capital Flows and Market Supply 

The expansion in primary market activity has coincided with continued domestic participation in equities, particularly through systematic investment plans (SIPs). 

However, the scale of fundraising has been substantial. IPOs and follow-on offerings together accounted for nearly 80% of the capital flowing into equities through SIP investments. 

At the same time, foreign portfolio investors withdrew roughly $19 billion from Indian equities last year, adding another dimension to market flows. 

Read More: Government Introduces Graded Public Shareholding Rules for Mega IPOs! 

Conclusion 

India’s IPO market has expanded rapidly, placing the country among the leading venues for equity fundraising.  

Yet the data suggests that strong listing activity has not always translated into gains for investors, with limited median returns and a large share of funds going towards promoter stake sales. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   
 
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