India’s IPO market is booming, but most of the money from big listings is going to shareholders, not to the companies themselves.
2025 IPO Activity in Numbers
In 2025, 103 companies listed on the mainboard and raised about ₹1.76 trillion. Of that amount, ₹1.11 trillion (63.4%) was paid to existing shareholders through an Offer for Sale (OFS). Only ₹0.64 trillion (36.6%) was new capital for the companies.
On the SME side, 267 smaller firms raised ₹11.43 billion. Here, ₹10.39 billion (91%) was fresh issue money, while just ₹1.04 billion (9%)** went to existing owners.
What Is an OFS?
An Offer for Sale lets current owners—like promoters or private‑equity investors—sell their shares directly to the public. The money they receive goes to them, not to the company. A fresh issue creates new shares, and the cash goes into the company’s bank account for things like expansion, debt repayment, or working capital.
Mainboard Deals Skewed Toward Exits
- LG Electronics India raised ₹11.61 trillion entirely through an OFS by its parent company.
- ICICI Prudential AMC listed for ₹10.60 trillion, also via an OFS from its promoter.
- Lenskart Solutions raised ₹7.28 trillion, with 70.5% (₹5.13 trillion) coming from an OFS.
- Tata Capital saw 56% of its ₹15.51 trillion IPO come from existing shareholders.
These examples show that many big IPOs are being used as an exit route for private‑equity investors and long‑term promoters rather than to fund new growth.
SME Listings Focus on Fresh Capital
Smaller companies tend to need cash for expansion. Over 90% of the money raised in SME IPOs is new capital that goes straight into the business.
Why This Matters to Retail Investors
When most of the proceeds go to selling shareholders, investors buying those shares are essentially providing liquidity for exits, not funding future growth. This can make the investment riskier because the company may not have fresh cash to drive expansion.
Analysts note that mature, profitable firms are using the mainboard to transition from high‑risk private investors to broader market investors. While the companies are generally stable, the lack of new funding means they must rely on operational improvements to justify their high valuations.
Expert Views
- Bhavesh Shah (Equirus Capital): "These are scaled, profitable businesses entering the market at a strong operational point. Early investors are now looking to cash out after long holding periods."
- Dev Chandrasekhar (Transcendum): "When 63% of mainboard IPO money goes to selling shareholders, retail investors are mainly financing exits, not growth."
Bottom Line
India’s mainboard IPOs are becoming a popular exit strategy for private‑equity and long‑term promoters. Retail investors should recognize that buying into these offers may not fund the next phase of the company’s growth, so careful due diligence is essential.
Remember, this is perspective, not a prediction. Do your own research before making any investment decisions.