India’s stock market saw a very strong year in FY2025–26, especially in the initial public offering (IPO) space. Companies raised a record ₹1.79 lakh crore through 112 mainboard IPOs. This was the highest amount ever collected in a single year and about 10% more than the previous year. It also marked the second year in a row where IPO fundraising hit a new record, showing how active and deep the market has become.
This large amount of money raised shows that many companies were eager to grow and needed funds, while investors were also willing to invest in new businesses. Even though the market faced ups and downs, the IPO segment remained very active for most of the year.
The year began with strong momentum. Several large companies came to the market with big IPOs and attracted a lot of attention. Names like Tata Capital, HDB Financial Services, and LG Electronics India raised more than ₹10,000 crore each. These large issues played a major role in pushing the total fundraising to record levels.
There was also a wide mix of companies from different sectors such as finance, manufacturing, technology, and consumer goods. This variety gave investors many options and helped keep interest alive across the year.
The steady flow of IPOs showed that businesses saw the stock market as a good place to raise money instead of depending only on loans or private funding.
Even though the overall numbers were strong, the last few months of FY26 showed signs of slowing down. In the final quarter, companies raised only around ₹18,772 crore, which was much lower compared to earlier quarters.
This slowdown happened because market conditions became uncertain. Stock prices were more volatile, and investors became careful about where they put their money. Some companies also delayed their IPO plans, waiting for better market conditions.
This shift clearly showed that while the IPO market was strong overall, it was not completely free from global and local economic pressures.
One of the biggest concerns during FY26 was the performance of IPOs after listing. In simple terms, many investors did not make strong profits when shares started trading in the market.
The average listing gain dropped sharply to around 8%, compared to nearly 30% in the previous year. This means that earlier investors were making quick and large profits, but in FY26 those gains became much smaller.
Even more worrying was that the average return after listing turned negative, at about -7%. This means that many stocks fell below their issue price after some time. In fact, nearly two out of three IPOs were trading below their original price.
This created disappointment among investors and raised questions about whether some IPOs were priced too high.
Retail investors, or individual investors, had played a big role in driving IPO demand in earlier years. However, in FY26 their participation reduced noticeably.
The number of retail applications dropped by around 40%. Oversubscription levels also came down, meaning fewer people were rushing to apply for IPOs.
The main reason for this change was the weaker returns. When investors saw that many IPOs were not giving good profits, they became more cautious. Instead of applying for every new issue, they started choosing only those companies that looked strong and fairly priced.
This shows a clear shift from excitement to careful decision-making among small investors.
While retail participation slowed, institutional investors helped keep the IPO market stable. Domestic institutional investors, especially mutual funds, played an important role by investing large amounts in IPOs.
These investors often act as anchor investors, which gives confidence to others. Their presence ensured that many IPOs were still able to get enough demand even when market sentiment was weak.
At the same time, foreign investors were selling more shares in the Indian market during FY26. This made the role of domestic investors even more important in maintaining balance.
Interestingly, while IPOs reached record levels, total fundraising from the stock market actually fell by about 18% in FY26. This happened because other methods like follow-on public offers (FPOs) and qualified institutional placements (QIPs) were used less.
This shows that IPOs were the main driver of fundraising during the year, even as other channels slowed down due to uncertain market conditions.
Looking ahead, there is still a strong pipeline of companies planning to launch IPOs. More than 140 companies have already received approval to raise nearly ₹1.75 lakh crore, and many others are waiting for clearance.
This indicates that interest in going public remains high. However, future activity will likely depend on market conditions.
Companies may become more careful about pricing their IPOs, and investors may focus more on business quality rather than quick gains. The weak performance of many IPOs in FY26 has made both sides more cautious.
FY26 was a record-breaking year for India’s IPO market, with ₹1.79 lakh crore raised. It showed the strength and growth of the country’s capital markets. However, the year also highlighted some challenges, especially weak returns and lower retail participation.
The overall picture is mixed. On one side, companies successfully raised large amounts of money. On the other, many investors did not see strong profits.
The coming year is expected to bring a more balanced approach, where quality, fair pricing, and long-term growth become more important than short-term excitement.