India’s IPO Market: $20 Billion Yearly Becomes Norm as JP Morgan Predicts Strong Growth Ahead

India’s primary market is experiencing a noteworthy transformation, with annual initial public offering (IPO) issuances stabilizing around $20 billion, as reported by JP Morgan. This year, India has already reached $21 billion in IPOs, matching last year’s total, and is projected to surpass $23 billion by year-end. This growth is largely fueled by substantial offerings, such as ICICI Prudential AMC’s planned ₹10,000 crore issue, indicating a promising future for the market.

IPO Market Dynamics

Abhinav Bharti, JP Morgan’s head of equity capital markets, noted that the $20 billion annual issuance has become the new standard for India’s IPO market. He expects this figure to establish a consistent annual run rate moving forward. Presently, around 20% of the IPO demand comes from consumer technology and new-age businesses, a share Bharti anticipates could rise to over 30% in the next five years. He also mentioned that approximately 20 startups, valued at hundreds of millions of dollars, are gearing up to enter the market. Among them, four to five companies are expected to launch IPOs exceeding $1 billion, potentially raising a combined total of $8 billion, with two large offerings anticipated from technology-driven firms.

Valuations and Market Challenges

Bharti stated that the Indian market has largely overcome previous challenges encountered by new-age businesses, as some recent IPOs are trading at a premium. He attributed this positive trend to private equity investments made in prior years, which have helped maintain a strong pipeline for IPO exits. However, he acknowledged that a key part of recent IPO activity has been driven by offer-for-sale transactions from existing investors. This trend reflects a slowdown in private capital expenditure and a decrease in fundraising through qualified institutional placements (QIPs). Overall, equity capital market activity, including follow-on offerings and institutional placements, has been softer in 2025.

Equity Issuances and Future Outlook

JP Morgan forecasts that total equity issuances for 2025 will reach around $65 billion, down from $72 billion in 2024. This decline is primarily due to a significant drop in QIP fundraising, which has fallen to $10 billion this year from over $22 billion last year. Notably, the State Bank of India has contributed $3 billion to this total. Looking ahead, JP Morgan anticipates a resurgence of foreign portfolio flows into Indian markets next year, citing improved valuations. The bank views India as a defensive investment destination for global investors, especially amid the artificial intelligence-driven boom in developed markets.

Market Capitalization and M&A Activity

Nitin Maheshwari, co-head of investment banking at JP Morgan, projected that India’s overall market capitalization is set to double to around $10 trillion within the next five years, positioning it as the world’s third-largest market after the United States and China. In the realm of mergers and acquisitions, Maheshwari noted that outbound activity is gaining traction, driven by strong corporate balance sheets, low leverage, and increased confidence among Indian companies. He pointed out that Japan and the Middle East continue to exhibit significant inbound interest, particularly in the financial services sector.

Digihunt is not a financial advisor and this is not investment advice.