IPO fundraising hits record high, but listing gains drop to 3-year low

India’s primary market had a blockbuster year in 2025, with 101 companies raising a record ₹1.75 lakh crore through the initial public offering (IPO) route. But even as fundraising scaled new highs—both in value and volume—investors had fewer reasons to cheer, as muted listing gains dampened sentiment.

Data from Prime Database showed that the buoyant fundraising environment did not translate into strong debut-day gains for investors. The average listing gain in 2025 slipped to just 9.9%, the lowest since 2022, and well below the 30.25% recorded in 2024 and 28.68% in 2023. This contrasts sharply with the pandemic-era boom, when average listing gains stood at 43.82% in 2020 and 32.19% in 2021, fuelled by abundant liquidity and aggressive risk appetite.

Market participants attribute the muted listing performance to a combination of richer IPO valuations, subdued demand and higher supply, and volatile secondary market. With the number of IPOs rising steadily—from 57 in 2023 to 91 in 2024 and 101 in 2025—investors have become more discerning, focusing on fundamentals rather than chasing listing-day pops.

OFS dominated fundraising

The IPO activity in 2025 surpassed the previous year’s record high of ₹1,59,784 crore raised by 91 companies in 2024, while it logged a long jump from ₹49,436 crore mobilised in 2023, as per the data.

The surge in fundraising was underpinned by a strong pipeline of big-ticket IPOs and a sharp rise in offer-for-sale (OFS) components, highlighting promoters’ growing inclination to monetise existing stakes amid favourable valuations. In 2025, OFS accounted for nearly 63.5%, or about ₹1.11 lakh crore, of total IPO proceeds, marking one of the most OFS-heavy years in India’s capital market.

In 2024, fundraising through OFS remained elevated at ₹95,285 crore, accounting for 59.6% of total IPO proceeds. Historical trends show that OFS has consistently dominated India’s primary market. In 2020, it made up a striking 86.7% of the ₹26,613 crore raised, largely due to a smaller issue base. While its share moderated as IPO activity picked up, OFS remained significant—at 63.5% in 2021, 70.2% in 2022, and 58.2% in 2023.

Industry experts argue that the dominance of OFS in recent IPOs is not a sign of deterioration in corporate fundraising quality, but rather a natural progression of India’s maturing capital markets.

“There’s often a perception that OFS is a bad thing because the money goes to promoters or early investors. But I don’t subscribe to that,” said Pranav Haldea, managing director of Prime Database Group. “What we’re seeing today is the evolution of India’s capital market ecosystem—where angel investors, VCs, and PE funds provide the early risk capital. Once companies mature and establish governance, they come to the IPO market.”

He added that giving early investors the opportunity to exit is essential. “Only then will they be able to raise more money to invest in the next set of companies.”

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