India’s IPO engine stays strong, Domestic capital steps up as foreign flows turn volatile

India’s domestic capital markets have continued to demonstrate strong momentum in the current financial year, with fund mobilisation remaining robust amid healthy investor participation and supportive regulatory measures.

According to a recent report by the National Stock Exchange (NSE), as many as 83 companies have raised ₹1.3 lakh crore from the mainboard of Indian stock exchanges as of November in FY26, driven largely by a steady pipeline of high-profile initial public offerings. Of the total amount raised, 41 per cent came through fresh equity issuance, providing companies with direct capital for expansion, new projects and balance-sheet strengthening, while the remaining 59 per cent was mobilised through Offer for Sale, enabling promoters and early investors to partially monetise their holdings. The scale of recent listings is evident in the combined market capitalisation of newly listed companies, which has crossed ₹10 lakh crore , reflecting both the depth of the domestic market and its ability to absorb large issuances across sectors. Retail investor participation has also strengthened meaningfully, rising to around 25 per cent of primary market allocations, underscoring growing confidence among individual investors even as participation from qualified institutional buyers showed some moderation.

The SME segment has mirrored this positive trend, with 80 companies listing on the NSE’s Emerge platform during the period and raising ₹3,911 crore , nearly all of it through fresh equity, highlighting the platform’s growing importance as a source of growth capital for smaller enterprises. When viewed over a longer horizon, the current year’s performance fits into a broader upward trajectory in domestic fundraising over the past five years. Between FY21 and FY25, Indian equity markets collectively mobilised well over ₹5 lakh crore through IPOs and public issues , with annual fundraising volumes rising sharply during peak market years such as FY21 and FY24 before stabilising at elevated levels.

While a significant portion of funds in earlier years was raised through promoter stake sales, the share of fresh equity has remained substantial, signalling sustained capital formation rather than purely exit-driven activity. In contrast, foreign capital flows over the same period have been far more volatile. Foreign portfolio investors have alternated between strong inflows and sizable withdrawals, particularly during periods of global uncertainty, tighter monetary conditions and valuation concerns, leading to net outflows from the secondary market in some recent years.

Despite this, foreign investors have continued to show selective interest in India’s primary market, participating in large IPOs even when reducing exposure elsewhere. Crucially, the growing role of domestic institutional investors and retail participants has helped offset fluctuations in foreign funding, lending greater stability to the market. This structural shift has been reinforced by regulatory initiatives aimed at improving market access, easing listing norms, strengthening disclosures and facilitating smoother migration for SME companies to the mainboard.

Together, these developments point to a maturing equity ecosystem in which domestic savings increasingly underpin capital formation. With a strong pipeline of issuances, rising retail participation and continued policy support, India’s capital markets appear well positioned to sustain fundraising momentum and support long-term economic growth, even amid an evolving global investment landscape.