Indian initial public offerings have started 2025 on a high note, and issuance could even surpass last year’s success despite equity volatility that has plagued the market since September 2024.

India was the world’s number two new listing market by volume last year (USD 21bn), after the US (USD 41.6bn), and a strong pipeline of deals is providing some hope for equity capital market pros, sources said.

This year to date, Indian IPO volume stands at USD 888m from 26 deals, 4% higher than the same period in 2024 although the number of deals is lower than the 32 priced at this point last year, Dealogic data show. Meanwhile, India’s Nifty 50 Index has edged up 0.7% this year so far, gaining 9% over the past year, but is still 9.4% below the record high hit in September 2024.

The index’s pullback came after corporate earnings failed to catch up with heady equity valuations, which drove many foreign investors away, said an equity capital market banker.

“[D]espite short term shocks in (foreign institutional investors) flows,” said Utkarsh Sinha, managing director (MD) at Bexley Advisors, “Most global allocators remain optimistic about Indian equity, both public and private. China’s adversarial positioning in capital allocators’ minds is also proving to be a positive tailwind in this direction.”

Meanwhile, Sinha continued, “Indian retail investors are here to stay. The participation we’re seeing is unprecedented, and platforms like united payment interface (UPI) have democratized access to IPOs.”

BlackRock plans to hire nearly 1,200 people to expand two support hubs in India and build out its artificial intelligence capabilities in the country, Bloomberg reported on 5 February.

Investors were also concerned about US President Donald Trump’s tariffs vis-a-vis India, which exported USD 77.52bn worth of goods and services to the US in FY24, down 1.3% from the previous year’s record high.

This view was countered by Ravi Dharamshi, founder and chief investment officer (CIO) of ValueQuest Investment Advisors: “India is likely to emerge unscathed from the ongoing tariff war, as its economic model is largely domestically driven, making it less vulnerable to external shocks.”

Furthermore, Dharamshi continued, 2025 could surpass last year’s USD 21bn in terms of Indian IPO proceeds, given India’s “tremendous market depth since the global financial crisis (GFC), making it one of the most vibrant primary and secondary markets globally. The IPO route has delivered exits for many private equity (PE) investors, reinforcing a self-sustaining cycle of capital formation.”

Several large IPOs last year helped their private equity owners take profit.

Among them, a consortium including Accel Partners, Baron Capital, Norwest Venture Partners and Tencent sold stakes in food and grocery delivery service Swiggy [NSE:SWIGGY]; MacRitchie Investments Z47 in electric scooter manufacturer Ola Electric Mobility [NSE:OLAELEC]; TPG Growth and Vistra ITCL in infant care e-commerce player FirstCry [NSE:FIRSTCRY]; and Blackstone separately sold stake in Aadhar Housing Finance [NSE:AADHARHFC] and International Gemmological Institute [NSE:IGIL].

Majority shareholders not only locked in profits when their portfolio companies went public in India, but were also active in secondary offerings when the country’s index continued to set record highs month after month, before September’s correction, Dealogic data shows. In 2024, follow-on volumes from both primary and secondary recorded USD 52bn from 263 deals, a massive jump from the USD 23bn from 154 deals in 2023.

Healthcare leading pack so far in 2025 

The country’s IPO machine will continue powering ahead as “India is the only major country actively shrinking its balance sheet” while “corporate leverage is at its lowest in two decades,” Dharamshi said.

But not all corporates could be considered equal.

Top sectors contributing to IPOs last year by value were Technology (245); Auto/Truck (21); Utility and Energy (9%); Construction/Building (8%); and Healthcare (8%), according to Dealogic.

This year, two healthcare IPOs – Dr Agarwal’s Health Care [NSE: AGARWALEYE] and Laxmi Dental [NSE: LAXMIDENTL] – together raised almost 50% of the total USD 888m. While Dr Agarwal’s stock is flat compared to is offer price, Laxmi Dental has risen over 15%, as of 4 January closing.

Healthcare IPOs are likely to remain strong, both Dharamshi and a sector banker reckoned. The sector banker added that there is a strong pipeline of listings across various niches in the broader pharmaceutical and life sciences sector.

There are single speciality hospitals such as Dr Agarwal, multi-specialty hospitals, contract development and manufacturing organisation (CDMO) firms, and active pharmaceutical ingredient (API) firms, all of which would appeal to a very differentiated investor base, the banker added.

Contract research firm Anthem Biosciences, for example, has already filed its draft red herring prospectus (DRHP) for a USD 397m IPO.

Anthem Biosciences competes with Sai Life Sciences [NSE:SAILIFE], which debuted in December 2024 and has lost 11% since.

Outside the healthcare space, the IPO pipeline includes a couple of major foreign companies’ local operations, such as LG Electronics India, PayU, WeWork India, as well as Indian heavyweights such as fintech Pine Labs, renewable energy developer Hero Future Energies, mobile advertising network InMobi, Billionbrains Garage Ventures, which operates Groww, an India-based trading platform and retail stockbroker, and the much-awaited IPO of Reliance Jio Infocomm. Earlier this morning [6 February], the country’s IT consulting and services firm Hexaware Technologies launched an up to USD 1bn IPO, for which the books will open on 12 February.

In a separate trend, “it’s almost homecoming season for many Indian companies,” Sinha said. “We’re seeing firms that previously went global now realizing that the Indian capital markets are deeper and, frankly, more rewarding than before.” Firms including ReNew Energy Global [NASDAQ:RNW] and online retailer Meesho are among those listed elsewhere that are considering relisting in India, as exclusively reported by Mergermarket.

When asked whether Trump’s pending tariffs may dampen India’s pharmaceutical sector, the banker said India accounts for 40% of the generics consumed in the US, and they are affordable.

Trump may not tax pharmaceuticals too highly, therefore, as that could increase inflation which the US Federal Reserve has been trying to combat.

Another sector expected to see busy flows of IPOs this year would be technology and AI-driven IPOs; and consumer facing businesses, especially since the country’s 31 January budget unveiled a series of tax cuts that would “ignite India’s second engine of growth – discretionary spending,” according to Dharamshi.

Further, “financial services, renewables and most sectors built atop large-scale consumer-based spending are expected to continue to experience a positive sentiment. If these sectors remain buoyant, the IPO pipeline will stay robust,” Sinha added.

No better time for ECM bankers

ECM bankers working on Indian IPOs raised about USD 291m in fees last year, a level only surpassed by 2021’s USD 315m in 2021, according to Dealogic’s revenue data. This year to date, the figure stands at USD 19m already, against USD 18m in 2024.

Topping the charts last year was ICICI Bank, taking an eye-popping 11% share of the market. Four other Indian banks made up the top five: Kotak Mahindra Bank, Axis Bank, State Bank of India (SBI), and JM Financial.

This year Motilal Oswal Financial Services, which came in 23rd in 2024 on the fee tables, tops the charts, followed by GYR Capital Advisors and SBI.

It remains to be seen if the three’s momentum will carry on into the end of the year, but hopes are that this year’s pipeline is full enough for sell-side advisors to vie for fee income on par with – if not exceeding – last year’s.