Tata Capital, HDB lead India’s biggest IPO year: Rs 1.79 lk cr raised in FY26 even as listing gains plunge

India’s primary market closed the financial year 25-26 on a historic note, even as the final quarter lost steam.

Reading the first line, many might now wonder – how can a year that ends on a slow note still go down as the biggest in history? And if investors are turning cautious, how did companies still manage to raise record money from the markets?

This paradox is interesting to understand.

According to PRIME Database, Indian companies raised an all-time high Rs 1,78,963 crore through 112 mainboard IPOs in FY26. This is about 10% higher than the previous record of Rs 1,62,387 crore mobilised in FY25, which saw 78 IPOs.

But what makes this year even more interesting is not just the record-breaking number. Rather it is the rare back-to-back streak.

For the first time in years, India has seen two consecutive years of peak IPO fundraising.

Yet, beneath this headline number lies a more layered reality. This is where things start to get interesting. According to Pranav Haldea, Managing Director, PRIME Database Group, despite the tepid end to the year with just Rs 18,772 crore being raised in the last 3 months, it is for the first time in India’s history that there have been two consecutive years of all-time high IPO fundraising activity. In the past, a strong IPO year almost always was succeeded by a lull lasting two to three years.

Haldea pointed out that overall public equity fundraising, however, declined by 18% to Rs 3.05 lakh crore in 2025-26 from Rs 3.71 lakh crore raised in 2024-25, on account of lower mobilisation through FPOs and QIPs.

Investor enthusiasm has cooled, listing gains have shrunk, and market volatility has started influencing timing decisions.

Now, the key question many might be beginning to ask is this – Are we still in a boom phase or is the market quietly preparing for a reset?

Let’s take a look –

A record year – But the momentum faded when it mattered

Here when you look at the headline number, it suggests a blockbuster year. But, the final quarter of FY26 paints a very different picture from the rest of the year.

As per PRIME Database, the last quarter of FY26 saw IPO mobilisation of just Rs 18,772 crore. This muted ending contrasts sharply with the strong run seen earlier in the year.

This “tepid end” indicates a growing caution among both issuers and investors, as according to PRIME Database report.

More IPOs, But smaller on average

One of the most interesting trends this year is the changing composition of IPOs.

While the total amount raised hit a record, the average deal size dropped to Rs 1,598 crore. This is down 23% from Rs 2,082 crore in FY25. This indicates that the record was driven more by the number of IPOs rather than the size of individual deals, as per PRIME Database report.

At the top end, large issues continued to dominate attention. Tata Capital led the charts with a Rs 15,512 crore IPO. Further, it was followed by HDB Financial Services at Rs 12,500 crore and LG Electronics at Rs 11,605 crore.

However, the long tail of smaller IPOs played an equally important role. The smallest issue of the year, Shree Ram Twistex, raised just Rs 110 crore. This wide range highlights how the IPO market is becoming more inclusive, with companies of varying sizes tapping public markets, PRIME Database noted.

New-Age tech holds ground

New-age technology companies continued to be a key part of the IPO ecosystem.

As per PRIME Database, nine such IPOs were launched in FY26. This was same as last year.

However, the amount raised increased to Rs 32,509 crore from Rs 27,584 crore in FY25.

Investor demand: Still strong, but clearly cooling

Even though IPOs continued to attract subscriptions, the intensity of demand has moderated.

According to PRIME Database, only 56% of IPOs were subscribed more than 10 times in FY26, compared to 72% in the previous year. This decline shows that while investors are still participating, they are becoming more selective.

Out of the 108 IPOs with available data, 23 saw subscriptions of over 50 times. At the same time, many IPOs saw only modest demand, with subscriptions of just 1 to 3 times.

As per PRIME Database, the retail investor activity also slowed. The average number of retail applications fell to 12.87 lakh. This was sharply lower than 21.31 lakh last year.

Listing gains drop sharply, Post-listing returns turn negative

If there is one factor that clearly explains the cooling sentiment, it is the sharp drop in listing gains.

According to Haldea, IPO response was further impacted by weaker listing performance. Average listing gain (based on closing price on listing date) of the 108 IPOs which got listed thus far decreased to 8%, in comparison to 30% in 2024-25.Only 31% of IPOs delivered gains above 10%, a steep fall from 71% in FY25.

There were still a few standout performers. Bharat Coking Coal delivered a 77% gain on listing day, followed by Highway Infrastructure at 75% and Urban Company at 62%.

However, these were exceptions. The broader trend was much weaker.

More importantly, the post-listing performance has been disappointing.

According to PRIME Database, as of March 27, 2026, only 37 out of 108 IPOs were trading above their issue price. The average return slipped to 7%. This also marked the first time in several years that IPO returns turned negative.

Institutions step up as retail slows down

Anchor investors subscribed to 35% of the total IPO amount. For the first time, mutual funds overtook FPIs in the anchor category, contributing 14.89% compared to 13.38% by FPIs.

Overall, qualified institutional buyers accounted for 61% of the total issue size.

Interestingly, FPIs despite being net sellers in the secondary market to the tune of Rs 2.51 lakh crore and invested Rs 70,822 crore in IPOs.

Beyond IPOs: The bigger fundraising picture

While IPOs hit a record, overall public equity fundraising declined.

As per PRIME Database, total equity mobilisation fell 18% to Rs 3.05 lakh crore in FY26, compared to Rs 3.71 lakh crore in FY25.

At the same time, rights issues surged, more than tripling to Rs 45,198 crore. A major chunk came from Adani Enterprises Rs 24,930 crore issue.

SME IPOs: Higher activity, lower returns

The SME segment followed a similar pattern, that is, more activity but weaker returns.

As per primedatabase, 254 SME IPOs raised Rs 10,944 crore, up 20% from last year. However, average listing gains dropped sharply to 11% from 46%.

IPO pipeline ahead

Although there is a slowdown in sentiment, the IPO pipeline remains strong.

As per PRIME Database, 144 companies with SEBI approval are planning to raise around Rs 1.75 lakh crore. Another 63 companies are awaiting approval to raise Rs 1.37 lakh crore.

However, amid the ongoing geopolitical tension, companies are increasingly cautious about timing.

The latest swings in the market has led many issuers to adopt a wait-and-watch approach. Several companies have even allowed their approvals to lapse or withdrawn their filings.

What to watch next: Boom or turning point?

At an overall level, total fundraising by Indian corporates across equity and debt declined by 12% to Rs 19.33 lakh crore.

The IPO market now stands at a crucial juncture. The coming year will test whether this momentum can sustain or whether the tepid end of FY26 was an early signal of a more cautious phase ahead.