Track two: Indian IPO-bound firms explore private sales alongside listing plans

More than 10 active IPO mandates have transitioned to this dual-track model, especially for deals in the range of ₹500- ₹2,000 crore, in the past month, according to investment bankers and deal advisors familiar with the matter.

While the trend is becoming become more visible, intermediaries Mint spoke to declined to name any companies, citing dealmaking competition and confidentiality agreements governing the mandate shifts.

"I am seeing IPOs with new liquidity worth anywhere between ₹500 crore to ₹2,000 crore, turn into dual tracks over the last 30 days," a deal advisor working with IPO-bound companies told Mint on the condition of anonymity.

Market volatility cools IPO momentum

This shift follows a cooling investor appetite amid global uncertainty, which has slowed listing activity. As a result, companies have now begun seeking alternative routes to provide liquidity to shareholders and founders.

"The current environment is not conducive for launching IPOs," said Samir Bahl, chief executive of investment banking at Anand Rathi Advisors. "The primary reason for volume of IPOs was access to growth capital and to facilitate exits for financial sponsors. Those objectives are now being explored through alternative strategies including private credit, private equity and secondary transactions."

According to Prime Database, companies with approval from the Securities and Exchange Board of India (Sebi) that have not yet listed include the Munjal family's ₹3,600-crore Hero Fincorp Ltd offer, Morgan Stanley-backed Continuum Green Energy Ltd's ₹3,650 crore plan, and Norwest Venture Partners-backed Veritas Finance Ltd's proposed IPO worth ₹2,800 crore.

So far in 2026, several IPOs have hit the market despite a broader slowdown in primary activity, including Raajmarg Infra Investment Trust (InvIT)’s ₹6,000 crore issue, Clean Max Enviro Energy Solutions Ltd.’s ₹3,080 crore IPO, and artificial intelligence firm Fractal Analytics Ltd.’s ₹2,834 crore offering.

In 2025, there were 103 mainboard companies that raised over ₹1.75 trillion through IPOs, surpassing the previous record set in 2024.

How the dual-track process works

Under a dual-track process, a company files regulatory documents for an IPO while also soliciting bids from private equity firms or strategic buyers. This strategy allows boards to compare the valuation achieved in public markets against offers from private participants. If market volatility persists, the firm can opt for a private sale, bypassing the requirements of a public listing.

Investment bankers tasked with managing IPOs are now identifying buyers in the private market for their current clients, a second investment banker said, also requesting anonymity. "Currently, we are also looking to facilitate a private transaction for a company where we do not hold an official IPO mandate," this banker said.

"We need to maintain the deal flow for our own benefit," a third investment banker said. "If not IPOs, then private transactions will ensure that commissions stay on track during a period of reduced primary market activity."

Legal and structural complexities

While dual-tracking sounds elegant in a banker's pitch, the legal architecture rarely keeps pace, Amit Tungare, managing partner at Asahi Legal, said. "Engagement letters drafted for an IPO mandate seldom anticipate a concurrent M&A process — that gap becomes a fee dispute the moment a deal closes on the private side."

"The dual-track approach will now become a mainstay as long as the gap between issuer valuation expectations and public market pricing remains," the deal advisor cited earlier said. "This transition in strategy reflects how promoters view the path to monetization. The focus has moved from achieving a listing to securing a transaction, regardless of the venue," they added.

From a comparative standpoint, an IPO — although more expensive and accompanied by substantial post-listing compliance obligations—offers a cleaner and more definitive transition in terms of ownership dispersion and governance. "In contrast, a private equity or strategic transaction may involve lower immediate costs but introduces greater legal and structural complexity, given the negotiated nature of control rights, governance arrangements, and exit pathways," Archana Balasubramanian, partner at Agama Law Associates, said.

Market risks

A cooling IPO market is beginning to weigh on India's capital formation pipeline, with about ₹18,000 crore in planned fund-raising at risk, Mint had reported on 25 March. The impending expiry of these clearances, given by Sebi between April and June 2025, underscores how volatile market conditions are prompting firms to defer listings, raising the prospect of higher costs, delayed timelines and a near-term squeeze on fresh market liquidity.

The market regulator earlier this month said observation letters expiring between 1 April and 30 September 2026 will now remain valid until 30 September 2026. An observation letter indicates that the regulator has reviewed the proposal, suggested the changes to ensure compliance, and has allowed the company to launch the issue.

Meanwhile, companies pursuing a dual-track strategy will have to be mindful of regulatory considerations on information sharing during this window and try and ensure parity of information under both processes, said Janhavi Manohar, partner at Cyril Amarchand Mangaldas.

Agnidev Bhattacharya

Agnidev is a business journalist with over two years of reporting experience tracking the intersection of capital, policy, and corporate strategy in India.He joined Mint in December 2025, after a stint at NDTV Profit (erstwhile BQ Prime). At Mint, Agnidev focuses on the high-stakes world of the Indian capital market, specialising in mergers and acquisitions, burgeoning IPOs, and the investment banking industry.Backed by a rigorous, data-driven approach, Agnidev frequently breaks news on the valuation cycles, deal pipelines and listing strategies of India’s most prominent companies. His reportage offers deep dives into the operational health of market leaders across the corporate landscape, providing readers with a clear-eyed view of institutional growth.He has reported on major issues like India's derivatives frenzy, IPO froth, the competitive quick commerce industry, the real-money gaming ban, and has broken investigative stories related to scandals such as IndusInd Bank's accounting manipulation and the Gensol-BluSmart fiasco.As a reporter, he brings stories that ultimately affect your stock market investments, and tries to bring clarity and brevity in a field that is often filled with jargon and noise.