By Priyanka Salve

Copyright cnbc

In 2024, India ranked number one globally in term of IPO volumes, listing nearly twice as many companies as the U.S. and more than two-and-a-half times as many as Europe, the EY report showed.

In terms of IPO value, India ranked second with companies raising a total of $19.9 billion last year compared with $32.8 billion raised in U.S. This included the country’s largest and globally the second-largest IPO, Hyundai Motor India, which successfully raised $3.3 billion from investors.

The current market situation is a far cry from Coal India’s $3 billion issue a decade back that, per domestic media, had led to a liquidity crunch in the country’s banking system, including massive redemptions in mutual funds from investors eager to invest in the IPO.

The ability of Indian markets to absorb large issuances has improved, thanks to the rising flows from domestic investors, Dasani said, adding that if foreign institutional investors can sell without any major “impact cost,” then FIIs can also invest more. Impact cost refers to the extent to which trade orders — buy or sell — can move stock prices.

The steady demand from domestic institutional investors has deepened equity markets and improved liquidity, giving FIIs the confidence of participating in IPOs without worrying about getting trapped.

For the past 54 months, equity mutual funds have seen net inflows, with assets managed by Indian mutual funds rising to about $850 billion in June 2025 from about $696 billion in June 2024, according to data from the Association of Mutual Funds in India. Sizeable equity markets mean larger appetite for bigger IPOs, drawing interest from FIIs.

“In terms of volume of IPOs, fiscal year 2026 will be similar to FY25, which was a record year in terms of public listings,” says Shouvik Purkayastha, managing director of investment banking at Nuvama. Given a number of big corporates queuing up for listing this year, he expects an “uptick in value terms”.

October is likely to witness the launch of Tata Capital’s $2-billion IPO and a similar-sized issue of shares by the Indian subsidiary of South Korea’s LG Electronics, according to media reports.

Last month, Mukesh Ambani, chairman of Reliance, India’s retail-to-telecom conglomerate, also announced plans to list his telecom business, Jio Platforms, in the first half of 2026.

This interplay between domestic and foreign capital is creating a virtuous cycle. Strong domestic participation gives companies confidence to launch bigger IPOs and those in turn attract foreign investors that prefer scale and liquidity.

To put it all together, foreign investors selling in the secondary market while writing checks for IPOs is not a contradiction, it is a strategy — one that has paid off well so far.

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