Despite a recent pause in the primary market amid volatility in the secondary market, initial public offering (IPO) fundraising soared to an all-time high in the fiscal year 2024-25. A total of 78 firms raised a record ₹1,62,387 crore through main board IPOs in FY25, more than 2.5 times the ₹61,922 crore mobilised by 76 IPOs in 2023-24. Of these, over 60% (or 46 stocks) were trading above their issue prices, according to PRIME Database, India’s leading primary capital market database.

Strong IPO pipeline

The pipeline remains robust, with 49 companies approved by SEBI planning to raise ₹84,000 crore, while another 67 firms, seeking to mobilise approximately ₹1,02,000 crore, await regulatory clearance. Among these 116 companies, four are new-age technology firms looking to raise around ₹8,500 crore.

Investor enthusiasm and oversubscription

Investor response to IPOs was overwhelmingly positive, according to Pranav Haldea, Managing Director of PRIME Database. Of the 78 IPOs, 56 saw massive oversubscription of over 10 times, including 33 IPOs that were oversubscribed by more than 50 times. Seven IPOs were oversubscribed by over three times, while the remaining 15 were between one to three times.

Strong listing performance further fuelled investor enthusiasm. The average listing gain (based on closing prices on the listing day) rose slightly to 30%, compared to 29% in 2023-24. A total of 55 IPOs delivered listing-day returns exceeding 10%, with Mamata Machinery leading at 159%, followed by Bajaj Housing Finance (136%) and KRN Heat Exchanger & Refrigeration (117%).

The overall market fervour saw the average IPO oversubscription rise to 49 times, compared to 35 times last year. Retail investor participation was equally aggressive, with retail oversubscription jumping to 35 times from 30 times in the previous year. The number of retail applications surged to 21.33 lakh in FY25 from 13.15 lakh in FY24, with Waaree Energies receiving the highest number of applications (70.13 lakh), followed by Bajaj Housing Finance (58.66 lakh) and KRN Heat Exchanger & Refrigeration (55.23 lakh).

Average IPO size surges 2.5x

The average issue size more than doubled, reaching ₹2,082 crore in FY25, up from ₹815 crore last year. The largest IPO of the year was Hyundai Motor (₹27,859 crore), followed by Swiggy (₹11,327 crore) and NTPC Green Energy (₹10,000 crore). The smallest IPO was Kronox Lab Sciences, raising ₹130 crore.

New-age technology companies made a strong comeback after two relatively quiet years. Eight such firms—Awfis, Blackbuck, Digit Insurance, FirstCry, Ixigo, Mobikwik, Swiggy, and Unicommerce—raised a total of ₹21,438 crore, a significant jump from ₹3,040 crore in 2022-23 and ₹5,544 crore in 2021-22.

Institutional investors drive demand

Anchor investors subscribed to 35% of the total IPO amount. Foreign portfolio investors (FPIs) played a more dominant role than mutual funds, subscribing to 16% of the issue amount compared to mutual funds’ 13%. Overall, qualified institutional buyers (including anchor investors) subscribed to 67% of the total IPO issue amount. FPIs invested a substantial ₹1.21 lakh crore in the primary market in FY25, despite offloading ₹2.64 lakh crore in the secondary market.

Market correction dampens returns

While 46 of the 78 IPOs continue to trade above their issue price, the average return on listed IPOs has dropped to 15% due to market corrections in the latter half of the fiscal year. Historical IPO returns have declined over the years, with absolute returns of 300% in FY20, 257% in FY21, 71% in FY22, 75% in FY23, and 42% in FY24 (based on closing prices as of 24th March 2025).

Despite this, the record-breaking fundraising in FY25 underscores the resilience of India’s primary market, with strong demand from institutional and retail investors alike.