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The liveliest place in Mumbai’s financial district this year has not been the trading floor. It has been the meeting rooms. Bankers crunching valuations and founders practising their sales pitch, as well as lawyers reviewing prospectuses, have turned the city into a haven for new share sales. By December Indian firms had raised about $22bn from initial public offerings, more than ever before. That alone is staggering. What matters more is where the money came from and what that says about how Indian finance now works.
India has flirted with IPO booms before. In 2007 as global liquidity sloshed about, firms rushed to list. In 2021 flush with pandemic-era savings and stimulus, retail investors piled in. Those surges fizzled when conditions tightened. What distinguishes the current wave is its persistence. India raised more than 1trn rupees from IPOs in 2021, again in 2024 and again in 2025. Two consecutive record-breaking years suggest habit rather than hype.
The deals themselves have also changed. The biggest floats of 2025 read like a roll-call of established corporate India rather than a speculative catalogue of start-ups. Tata Capital, the financial arm of the Tata Group, raised about $1.7bn. HDB Financial Services, a shadow lender tied to HDFC Bank, followed close behind. LG Electronics floated its Indian unit for $1.3bn. ICICI Prudential Asset Management and Hexaware Technologies also joined the billion-dollar club. These were not companies forced to list. They went public because the moment looked right.
The timing was odd. India’s wider stock market had a dull year. Trading slowed. Foreign investors, unsettled by new American tariffs under President Donald Trump and a darker global trade mood, cut their exposure. Foreign ownership on the National Stock Exchange fell below 17%, the lowest in 15 years. Yet the flow of new listings only quickened. In September alone, 25 companies came to market, the busiest month since 1997. Over the year more than 200 firms filed prospectuses or secured regulatory approval, a level not seen in at least 25 years.
The explanation lies at home rather than abroad. India’s equity market now largely pays for itself. In 2021 foreign investors still supplied more than two-fifths of IPO funding. By 2025 their share had fallen to about a quarter. Domestic buyers filled the gap. Mutual funds, insurers, pension funds, alternative investors and family offices now channel roughly $5bn into equities a month. Retail investors, entitled to 35% of IPO shares, have regularly taken their full share. For companies going public, local money has become the main prop.
This change did not happen overnight. During the pandemic millions of Indians began buying shares as lockdowns limited spending and phone-based trading made markets easy to reach. Monthly investment plans now send small but steady sums into mutual funds. Insurers and pension funds, pushed by regulation and ageing savers, have also moved further into equities. Together they have remade a market once driven by foreign money into one that increasingly runs on its own.
Bankers welcome the change. In past cycles, a shake-up in New York or London could halt deals in Mumbai. Today foreign withdrawals hurt sentiment but do not stop new listings. That certainty is why companies went ahead even as overseas investors sold in the secondary market. Many had lined up their IPOs months in advance. The reliable presence of domestic buyers made delays pointless.
There is a paradox here. IPOs boomed even as daily trading in the cash market fell to about $12bn from $15bn in 2024. Earnings growth slowed to single digits. Valuations, still high by emerging-market standards, were harder to defend. New listings prospered in a market that otherwise seemed sluggish. Their appeal lay in novelty: IPOs conferred a chance to invest in newer parts of the economy such as fintech platforms and consumer brands, while established sectors felt dull.
Financial services led the way. Banks, insurers and asset managers raised a big share of the money. India’s credit system is growing, the middle class is expanding. And savings are leaping. Buying shares in these firms felt like a bet on long-term habits rather than next quarter’s earnings. Consumer services, capital goods as well as automotive companies followed, providing a blend of steady growth and cyclical opportunity.
Multinationals took note. Listing an Indian subsidiary has become a smart way to access local valuations while staying in control. Rothschild expects at least ten foreign firms to float Indian units next year. Coca-Cola’s bottling business is among them. For global groups Mumbai now provides capital as well as credibility: cash to grow and a local share price to show commitment.
The boom has been good for middlemen. Investment banks took in more than $300m in IPO fees by November, after nearly $350m in 2024. Four of the top five firms in the equity-offering table come from Wall Street. JPMorgan Chase has moved senior bankers from New York to India, a small but telling shift. Fees are still low by regional standards, about 1.8% on average, but the sheer number of deals has made up for it.
Not all have done well. By the end of the year, more than half of the roughly 358 companies listed on India’s main and junior boards in 2025 were trading below their offer prices. Small listings made up most of the laggards, though even some big names barely stayed afloat. Tata Capital and HDB Financial hovered just above the line. Ola Electric, which went public in 2024 amid much fanfare, became a warning as losses grew and shares fell.
That weak showing shows the limits of homegrown enthusiasm. A market backed mostly by local money can keep up the flow of deals, but it cannot defy reality. High share prices need strong profits. With earnings growth slowing letdowns have been common. Domestic investors, though steady, are not endlessly patient. Several fund managers say they are being pickier, backing firms with real cashflow and clear pricing power rather than stories.
Politics adds another layer of doubt. Indian stocks bounced back faster than most after Mr Trump put in place reciprocal tariffs in April, showing the strength of local buyers. Yet talks with America are still stuck. A long standoff would weigh on exporters and sentiment alike. Homegrown money can soften the blow but it cannot change the hard maths of trade.
What then should one make of 2025’s IPO rush? It shows growth rather than a frenzy. India’s stock markets have built a deep local base that can carry a strong stream of new listings. Founders now see public markets as a trusted way to cash out and win standing. Regulators, once too cautious, have kept approvals flowing. Even foreign investors, though fewer, still hunt for careful bets, especially in tech.
The danger is overconfidence. A market that feeds on itself can miss its own faults. If local money chases every deal standards slip. The recent crop of poor performers is a warning, as is the cooling of the wider market. The real test will come when growth slows or global conditions turn harsh. Then it will be clear whether India’s IPO engine runs on lasting confidence or mere habit.
In the meantime the conference rooms stay full. More heavyweights are lining up: Jio Platforms, Flipkart, perhaps even the National Stock Exchange itself. If they make it, 2026 could yet set a new record. Bankers would do well to keep their schedules clear. ■
