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Chandigarh — After a two-month lull, Mainboard Initial Public Offerings (IPOs) have roared back to life, underscoring investor confidence and India’s enduring market strength amid complex global conditions. The Indian primary equity market regained its footing in May 2025, with three Mainboard IPOs collectively raising around ₹5,250 crore, each averaging an issue size of approximately ₹1,750 crore. This marked a significant turnaround from the previous months, which saw no Mainboard IPO activity.
The broader revival of IPO momentum has been buoyed by an improving macroeconomic backdrop—marked by early signs of easing inflation, a record ₹2.1 lakh crore surplus dividend transfer from the Reserve Bank of India (RBI), a new Free Trade Agreement (FTA) with the United Kingdom, and positive sentiment around ongoing trade talks with the United States and the European Union.
However, experts caution that escalating geopolitical tensions in West Asia could pose short-term headwinds, especially by disrupting global trade and commodity markets—potentially impacting sentiment among IPO aspirants in the coming quarters.
A Sectoral Story: Consumer Discretionary Dominates IPO Charts
All three Mainboard IPOs in May 2025 emerged from the consumer discretionary sector, continuing a trend that has defined FY25. Notably, this sector accounted for 40% of the ₹1.6 lakh crore raised through Mainboard IPOs in FY25 so far, reflecting the market’s optimistic outlook on consumer-driven growth amid India’s economic rebound.
According to analysts, this trend mirrors the post-pandemic shift in consumer behavior and disposable income, driving demand for everything from automobiles to leisure products. Sectors such as retail, lifestyle, and digital commerce have seen a surge in IPO interest due to robust domestic consumption patterns.
Strong Institutional Backing Amid Retail Optimism
The IPOs in May saw robust institutional participation, with Qualified Institutional Buyers (QIBs) absorbing 67% of the allocation. Retail Individual Investors (RIIs) accounted for 21%, and Non-Institutional Investors (NIIs) made up the remaining 12%. This pattern closely aligns with allocation trends seen in the previous fiscal year and reflects sustained confidence among large funds and retail investors alike.
On the SME Emerge platform, which caters to smaller enterprises, the allocation pattern was slightly different. Retail investors led the charge with 37% of the shares, followed by QIBs at 34% and NIIs at 24% over the last two months. This highlights the growing appeal of SMEs to both individual and institutional segments.
Beyond Equity: A Sluggish May for Fundraising
While the return of IPOs is encouraging, other fundraising avenues witnessed a sharp slowdown. Further issuance of equity capital dropped to just over ₹3,750 crore in May, a steep fall from nearly ₹49,000 crore in April. The debt markets also showed subdued activity, with ₹1.3 lakh crore raised, dominated by Commercial Papers (CPs), which accounted for 54%, while the remaining 46% came from Non-Convertible Debentures (NCDs) via private placements.
Market watchers attribute this cautious approach to global volatility, policy uncertainty around interest rates, and inflation forecasts in advanced economies like the U.S.
IPO Performance: Fresh Capital and Listing Gains
A notable feature of the three Mainboard IPOs in May was the overwhelming share of fresh issuance. Fresh capital made up 93% of the total issue size, compared to only 35% in FY24. This indicates a strong push by companies to raise capital for expansion rather than merely providing exits to existing shareholders.
Importantly, all three IPOs delivered listing gains, bolstering investor confidence. Collectively, the companies added over ₹20,000 crore in market capitalisation by the last trading day of May—offering optimism for upcoming issues in H2 FY25.
On the SME front, six companies listed on the NSE Emerge platform in May. While three debuted with listing gains between 1% and 27%, the other three posted listing discounts ranging from 10% to 48%. Nonetheless, the total market cap of the 619 listed SMEs on Emerge (including those migrated to the Mainboard) crossed ₹2 lakh crore, a major milestone. Of this, ₹12,000 crore was added in May alone, including ₹779 crore from newly listed firms.
As India heads into the second half of FY25, market resilience will be tested by both internal and external factors. While domestic macros remain supportive—driven by robust tax collections, strong GST numbers, and rising foreign direct investment (FDI) flows—global risks like geopolitical tensions, U.S. Federal Reserve decisions, and commodity price volatility could determine the pace of IPO activity.
Industry experts remain cautiously optimistic, expecting a strong IPO pipeline in sectors such as renewable energy, logistics, fintech, and healthcare in the months ahead.
