Primary Market FY26: India Tops Global IPO Charts as Market Resilience Shines

India’s primary markets continued their strong performance in FY26, showing remarkable resilience despite global uncertainties and patchy issuance overseas. The Economic Survey 2025–26, presented by Finance Minister Nirmala Sitharaman, highlights that the first nine months of the fiscal saw a significant jump in IPO activity, with companies successfully raising substantial capital.

This growth underscores the strength of India’s macro fundamentals, rising retail participation, and regulatory support from SEBI, which together have kept the market vibrant and active.

Market Performance in FY26

• IPO volumes rose 20% year-on-year, signaling continued interest in equity markets.
• Funds raised climbed 10%, positioning India at the top of global IPO charts.
• Overall resource mobilisation from primary markets (equity and debt) stood at Rs 10.7 lakh crore till December 2025.
• Over the past five years, primary market mobilisations totalled Rs 53 lakh crore, including Rs 14 lakh crore raised via equity.

While these numbers show headline strength, the survey points to a more nuanced market dynamic: existing shareholders are increasingly using primary markets to exit via Offer for Sale (OFS) transactions, rather than companies raising fresh capital.

Main Market Insights

• Mainboard listings increased to 94 from 69 compared to the previous year.
• Total proceeds from mainboard listings reached Rs 1.60 lakh crore, up from Rs 1.46 lakh crore.
• OFS accounted for nearly 58% of the total capital raised, highlighting that a significant portion of primary market activity catered to shareholder exits.

This trend shows that while the market is healthy and active, the nature of capital flow is shifting more towards liquidity and shareholder exits rather than new corporate expansion.

SME Market Performance

The SME segment offered a more capital-raising focused story:

• SME listings rose to 217 from 190.
• Funds mobilised jumped to Rs 9,635 crore from Rs 7,453 crore.
• Since inception, over 1,380 SMEs have tapped the market, raising more than Rs 35,000 crore.
• Around 350 SMEs have eventually migrated to the mainboard, showing the stepping stone nature of SME platforms for high-potential businesses.

This indicates sustained investor appetite for emerging companies and new market entrants.

Surge in Retail Participation

Retail engagement has been a major driver behind primary market vibrancy:

• Demat accounts grew by 2.35 crore in the period, crossing 21.6 crore in total.
• Unique investors exceeded 12 crore, with women making up nearly 25%.
• Mutual fund participation also expanded, with unique investors reaching 5.9 crore, including many from non-metro regions.

Household awareness has increased significantly. SEBI’s 2025 survey shows 63% of households are aware of at least one securities market product. Simplified onboarding processes, combined with steady economic growth, have helped drive this participation.

Shifts in Household Savings

India is seeing a clear structural shift in household financial behaviour:

• Equity and mutual funds now account for 15.2% of annual household financial flows, up from 2% in FY12.
• Bank deposits have fallen to 35% from 58%, highlighting growing diversification.
• Direct equity holdings reached Rs 84 lakh crore by September 2025.
• Indirect exposure via funds has nearly tripled since 2014.
• Monthly SIP inflows surged sevenfold, crossing Rs 28,000 crore from April–November FY26.

These numbers indicate that investors are broadening their portfolios, rather than abandoning traditional savings instruments.

Regulatory Developments

The Securities Markets Code, 2025, introduced in December, represents a key reform:

• Consolidates legacy laws governing SEBI, securities contracts, and depositories.
• Strengthens transparency through mandatory consultations and disclosures.
• Limits interim regulatory orders to 180 days.
• Expands SEBI’s board to 15 members with greater independent representation.
• Clearly defines the statutory role of market infrastructure institutions.

The survey suggests that this framework could serve as a model for broader regulatory governance, beyond capital markets.

Summary

India’s primary markets FY26 performance reflects:

• Strong IPO volumes and funds raised, placing India at the top globally.
• A nuanced market where OFS transactions dominate, showing increased liquidity.
• Steady growth in SME listings, supporting emerging companies.
• Retail and household participation surging across demographics.
• Structural shift in savings, with equity and mutual funds gaining traction.
• Regulatory reforms enhancing transparency and governance.

Overall, the primary markets are robust, diversified, and evolving, showing resilience and vibrancy in FY26.

Source: Moneycontrol