Fundraising through mainboard initial public offerings (IPOs) by India Inc witnessed a sharp decline in the June quarter, even as offer-for-sale (OFS) issuances by promoters and the government surged significantly.
The amount raised through IPOs fell 89 per cent year-on-year to ₹3,777 crore during the June quarter, compared with ₹29,652 crore in the corresponding period last year, according to data from PRIME Database. The number of IPOs also declined to nine from 15 a year ago, with no mainboard IPO hitting the market in May.
On a sequential basis (quarter-on-quarter), IPO fundraising dropped 80 per cent from ₹18,778 crore raised in the March quarter.
In contrast, funds mobilised through OFS nearly doubled to ₹16,568 crore during the June quarter from ₹8,333 crore in the year-ago period. Sequentially, OFS issuances rose 56 per cent from ₹10,637 crore in the March quarter.
The sharp increase in OFS proceeds was largely driven by the government’s divestment programme in Coal India, Central Bank of India, NHPC, NLC India, General Insurance Corporation (GIC) and Indian Railway Finance Corporation (IRFC), apart from Bosch Home Comfort India.
Pranav Haldea, Managing Director, PRIME Database Group, said positive developments over the past two to three weeks have been reflected in the rally in secondary markets, encouraging a handful of IPO launches and fresh filings.
“While healthy subscription levels and strong listing performance will provide a positive signal, a sustained recovery in the IPO market will depend on a broader revival in secondary markets,” he said.
Prateek Indwar, Head of Equity Capital Markets at InCred Capital, said continued domestic liquidity remains the structural backbone of India’s capital markets, helping shield them from global uncertainties.
“The net positive institutional inflows seen in June demonstrate that domestic investors have significantly reduced India’s traditional dependence on foreign capital to anchor new public listings,” he said.
Narendra Solanki, Head of Fundamental Research-Investment Services at Anand Rathi Shares and Stock Brokers, noted that robust demand for OFS issues in public sector undertakings (PSUs) reflects investor interest in fundamentally strong companies offering attractive valuations and dividend yields.
“However, investors are becoming increasingly selective, favouring quality businesses with strong earnings visibility and healthy cash flows rather than the PSU sector as a whole,” he added.
Sneha Poddar, Vice-President (Research), Wealth Management, Motilal Oswal Financial Services, said fresh IPO supply remained relatively subdued due to valuation concerns and intermittent market volatility.
“However, the outlook for the second half of FY27 appears considerably stronger, with large issuers such as NSE and Jio Platforms expected to enter the market. SBI Mutual Fund has already secured SEBI approval for its IPO,” she said.
Akshay Gupta, Director at Prime Securities, said IPO fundraising momentum was impacted by market uncertainty, currency weakness, geopolitical tensions and valuation-related concerns. However, several companies remain on the sidelines and are likely to tap the market during the second half of the current fiscal year.
“The rise in OFS activity reflects promoters and private equity investors using a relatively subdued issuance environment to monetise holdings, rather than indicating any structural shift away from fresh capital raising through IPOs,” he added.