India's capital markets are set to witness unprecedented activity in 2025, building on the strong momentum from the previous year. The country's IPO ecosystem has showcased remarkable resilience and growth, underpinned by increasing investor participation and a robust pipeline of public issues.

Key Insights from 2024

The year 2024 was a stellar one for the Indian IPO market, with 91 companies raising a total of ₹1.60 lakh crore, marking a threefold increase from 2023. This surge reflects the growing confidence of businesses and investors alike in India's financial markets.

SME IPOs Shine Bright

One of the standout trends from 2024 was the exceptional performance of SME IPOs, which raised ₹8,761 crore, an 87% growth compared to 2023. The average size of SME IPOs increased sixfold over the last four years, demonstrating growing demand and confidence in smaller enterprises. Retail participation also hit new highs, with the average number of retail applications rising to 1.88 lakh from just 297 in 2020.

Public Sector Contributions.

The Public Sector Undertakings (PSUs) also played a significant role in the market, with Offer for Sale (OFS) activities raising ₹8,947 crore. Key contributors included NHPC, NLC, GIC, and Cochin Shipyard, highlighting the government's successful efforts to tap capital markets for disinvestment.

2025: A Year of Promise

The stage is set for 2025 to surpass previous records. According to Prime Database, ₹1.80 lakh crore worth of IPOs are either approved by SEBI or awaiting approval. This pipeline includes 28 companies planning to raise ₹46,000 crore and another 80 companies targeting ₹1.32 lakh crore.

The Return of Tech IPOs.

After a hiatus, new-age consumer tech IPOs made a strong comeback in 2024, with companies like Swiggy, Mobikwik, and Firstcry raising a collective ₹21,438 crore. This trend is expected to continue in 2025, with sectors like technology and green energy leading the way.

Growth Drivers

Several factors contribute to the optimistic outlook for 2025: Retail Investor Participation: The democratization of investment opportunities has fueled greater retail involvement in both SME and mainboard IPOs. Regulatory Support: SEBI's proactive measures continue to create a favorable environment for capital market growth. Institutional Confidence: Qualified Institutional Placements (QIPs) witnessed a threefold rise in 2024, with 99 companies raising ₹1.38 lakh crore.

Challenges Ahead

While the outlook remains positive, challenges such as global market volatility, geopolitical tensions, and rising inflation could impact investor sentiment. Companies must also focus on valuation discipline to sustain investor trust.

Conclusion

India's IPO market is at an inflection point, poised to achieve new heights in 2025. With a strong pipeline, robust investor participation, and favorable economic conditions, the future of India's capital markets looks brighter than ever.

What are your thoughts on the evolving IPO landscape in India?