IPO Trends Shift as Capex Gets Just 17% Share of Funds Raised

The IPO market may look vibrant on the surface, but a closer look reveals a quiet shift in how companies are using their initial public offering proceeds. The numbers tell a clear story—fresh capital meant for business growth is shrinking, while promoters cash out more through the offer-for-sale route.

Over the last seven months of FY26, data mapped across 189 IPOs shows a pattern that has become hard to ignore.

Market Performance: A Strong IPO Cycle, but a Changing Mix

India’s IPO market has stayed active, with companies together planning to raise ₹1.82 lakh crore.

This includes:

• ₹1.20 lakh crore through fresh equity
• ₹62,000 crore through offer-for-sale (OFS)

Even in one of the strongest years for issuance, the share of funds actually flowing into businesses remains limited. The overall IPO pipeline is strong, reflecting issuer confidence, yet the structure of these offerings shows a different side of the story.

Main News: Only 17% of IPO Proceeds Going Towards Capex

The biggest takeaway from the dataset is simple—capacity creation is no longer the primary use of IPO funds.

Here’s how the utilisation breaks down:

• Only 17% of total IPO funds are marked for capex
• Just 65–67% of IPO money reaches the company after OFS payouts
• Of that amount, only 26% goes into capex, which equals around 16.5% of the overall equity raised.
• A slightly larger share is assigned to debt repayment.
• Working capital, branding, and lease payments make up another 12%
• Nearly 25% of proposed usage remains unspecified.

The trend signals a clear shift: promoters and early investors continue to cash out more aggressively, while companies deploy a smaller share toward expansion.

Company Details: What the Numbers Say About IPO Utilisation

The broader data on initial public offering flows highlight three major patterns:

1. OFS Share Keeps Rising

The offer-for-sale portion has climbed steadily, leading to:

• A higher percentage of exits by existing shareholders
• Lower inflow of fresh capital into companies

This upward trend suggests that IPOs are increasingly used as a monetisation event rather than a fundraising tool for new capex.

2. Fresh Issue Money Not Fully Going Into Growth

Within the fresh issue amount that does come into the company:

• Only 16.5% of the total raised equity is used for capacity creation.
• Debt repayment takes a bigger piece of the utilisation.
• A meaningful portion remains allocated to working capital and brand-related expenses.

3. IPO Activity Remains Strong Despite Changing Patterns

The primary market has crossed ₹1.5 lakh crore in capital raised in CY2025 so far.

The number of IPOs has also risen steadily:

• 57 issues in CY2023
• 86 issues in CY2024
• 93 issues in CY2025

Issuers remain confident, and investors continue to participate despite:

• Lower subscription averages (36.46x in CY2025 vs 51.23x in CY2024)
• More reasonable valuations (33.5x median vs 42.9x last year)
• Decline in loss-making companies' listing (8.6%)

These shifts point to a more selective market, with realistic pricing and disciplined listings becoming the norm.

Summary: A Changing Landscape for IPOs and Capex Allocation

The IPO cycle remains strong, but the purpose of IPO fundraising has clearly evolved.

While companies continue to list in high numbers, the share of funds used for capacity building is limited to 17%, signalling:

• More exits through OFS
• Lower infusion of fresh capex
• A rise in balance-sheet-driven utilisation, such as debt repayment and working capital

For investors and market followers, these numbers help decode how India’s IPO market is changing. The volume remains high, but the deployment of funds is shifting away from traditional expansion and towards internal clean-up and shareholder monetisation.