On October 7, LG Electronics India Ltd.’s $1.3 billion initial public offering (IPO) was fully sold within six-and-a-half hours, marking the fastest take-up of any major Indian IPO in 17 years. This offering is notable as it ranks as the third largest for India in 2025, contributing to the nation’s burgeoning appeal as a significant IPO market, with total proceeds nearing last year’s record of $21 billion.
The current wave of listings is characterized not just by sheer volume, but also by the profiles of investors. A growing base of domestic mutual funds, insurance companies, and millions of retail investors are increasingly absorbing large share sales, lessening the Indian equity capital market’s dependence on foreign funds. This shift, observed by some bankers and market analysts, may foster a more self-sustaining IPO landscape.
However, this optimism is tempered by potential risks. Concerns have been raised over inflated valuations for certain companies and over-subscription rates exceeding 100 times for many smaller IPOs, raising alarms about possible corrections that could negatively impact retail investors.
Since the beginning of 2024, domestic investors have invested ₹97,900 crore in IPOs compared to ₹79,000 crore from foreign funds, according to Prime Database. The share of domestic investments has reached nearly 75% for 2025, the highest recorded in any year where proceeds surpassed ₹1 lakh crore ($11.3 billion).
“The market is undergoing a sea change,” stated Abhinav Bharti, head of India equity capital markets at JPMorgan Chase & Co. He noted that households are increasingly channeling their savings into equities via mutual funds, establishing a foundation of demand that could persist for years.
LG’s IPO attracted bids at a remarkable pace of approximately $200 million per hour. Local investors accounted for 60% of total bids during the three-day subscription period, excluding the anchor book, and the stock surged 48% on its debut. This swift uptake marked the fastest for any Indian IPO raising at least ₹10,000 crore since Reliance Power Ltd. sold out its offering in under a minute in January 2008.
The ongoing shift in India’s IPO dynamics parallels the broader changes observed in its $5.3 trillion stock market, driven by an unprecedented retail investing surge spurred by the pandemic. The rise of mobile trading apps, simplified account setup processes, and the proliferation of investment guidance available through social media have led to millions of first-time investors entering the market. More conservative investors are using monthly plans to funnel substantial sums into local mutual funds, joining a market where the benchmark stock index is poised for its tenth consecutive annual gain.
Data shows that domestic institutional ownership in over 2,000 companies listed on the National Stock Exchange of India Ltd. has risen for five straight quarters, reaching 19.2% as of June, the highest level in 25 years. Conversely, foreign portfolio investors’ holdings have fallen to 17.3%, the lowest in more than a decade.
New listings offer increasingly attractive opportunities, as Indian IPOs have yielded a weighted average return of 18% this year, significantly outperforming the NSE Nifty 50 Index, which has gained 9.7% in the same period. Notably, this domestic growth has occurred despite foreign outflows of approximately $16 billion from the market—the second biggest on record—due to substantial investments from local investors, primarily mutual funds and insurance companies, amounting to over $70 billion.
With strong demand from local investors, the equity market has become the preferred platform for companies seeking to raise funds to capitalize on business opportunities within one of the world’s fastest-growing major economies.
“Every day there is a roadshow,” noted Vivek Toshniwal, CEO of Mumbai-based family office Plutus Wealth Management LLP, which invests in IPOs. “Such euphoria is unprecedented.”
Local bankers are reportedly working extended hours as IPO activity remains robust. According to Prime Database, 80 firms have received securities regulator approval for IPOs, while another 121 have submitted applications.
Expected multi-billion dollar offerings include those from Reliance Jio Infocomm Ltd., National Stock Exchange of India Ltd., and Walmart-backed Flipkart India Pvt. More than 300 listings have already raised nearly $16 billion in 2025, establishing India as the world’s fourth-busiest IPO venue, with only Hong Kong and mainland China surpassing it in proceeds.
Pratik Loonker, head of equity capital markets at Axis Capital Ltd., has described the last few years as the busiest in his two-decade career. He emphasized the symbiotic relationship between mutual funds and individual shareholders, noting that successful fund performance attracts more individuals to invest, thus generating further capital for deployment.
However, concerns persist regarding pricing and valuations in upcoming IPOs. Loonker cautioned that poor performances from a handful of large IPOs could quickly dampen sentiments.
Despite the general success of Indian IPOs in 2025, data from Bloomberg indicates that nearly half of all listings on the main and junior boards are currently trading below their initial values, particularly among smaller companies. In contrast, larger IPOs like HDB Financial Services Ltd.’s $1.5 billion offering are also underperforming despite being among the year’s most significant listings.
Although there has been a surge in IPO activity, the market has cooled slightly, with the median return for stocks one month after listing declining to 2.9% this year, down from 22% last year, as reported by Bloomberg.
Looking ahead, Saurabh Dinakar, head of Asia-Pacific global capital markets at Morgan Stanley, anticipates that 2026 could set new records for IPO proceeds in India. He likened the situation to the earlier stages of China’s IPO boom, attributing the growth to expanding internet access and a rising middle class, which parallel the conditions that helped develop China’s tech giants.
India is currently home to over 90 private firms valued at more than $1 billion, ranking it as the third-largest market for unicorns after the United States and China. Supportive regulatory changes, including recent adjustments designed to simplify the IPO process for large private companies, are further facilitating this growth.
The current wave of IPOs is not only attracting traditional sectors but also emerging themes including fintech and renewables, reflecting the evolving landscape of publicly traded companies in India, as noted by Rita Tahilramani, an investment director at Aberdeen Investments.
“Liquidity has been abundant,” she concluded.
