India has emerged as a dominant force in the global initial public offering (IPO) landscape, securing a 22% share of global IPO activity in Q1 2025, according to a comprehensive report published by Ernst & Young (EY). This achievement not only highlights the resilience of India’s primary markets but also reflects a maturing investor environment that continues to attract global attention, even amidst ongoing economic uncertainties around the world.

During the first quarter of 2025, India raised Rs 23,844 crore (approximately US$ 2.8 billion) through 62 IPOs on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). This impressive performance placed India at the forefront of the global IPO market, at a time when many developed economies experienced contractions in capital market activities.

Despite a decline in overall IPO volume by around 20% year-on-year, the Indian IPO market demonstrated robust fundamentals, particularly with the rise in the number of profitable companies going public. This trend has encouraged growing retail investor participation, driven by increased trust in the quality of listings and the financial strength of issuers.

Strong Fundamentals Drive Market Confidence

The Ernst & Young (EY) report emphasized that, while the total number of IPOs may have dipped compared to the same quarter last year, there was a notable increase in deal size and profitability. These shifts underscore a critical development in the Indian equity landscape — companies are not just rushing to list but are entering the market with sound financials and scalable business models.

A key insight from the report is the evolving quality-over-quantity approach being adopted by issuers and investors alike. The higher proportion of profitable IPOs is indicative of better-prepared companies and due diligence from merchant bankers and underwriters, which in turn builds investor trust and sustains long-term interest in the primary markets.

Sectoral Strength and the Rise of Tech IPOs

The sectors dominating the IPO space in Q1 2025 include Industrials, Real Estate, Hospitality & Construction, and Health & Life Sciences. However, it was the technology sector that stole the spotlight, with Hexaware Technologies' IPO raising a massive Rs 8,516 crore (US$ 1.0 billion), becoming the largest offering of the quarter.

This milestone reaffirms India's growing status as a hub for technology-driven enterprises. With increasing digitisation and demand for enterprise software, cloud services, and automation solutions, technology companies are well-positioned to capitalise on investor appetite. The success of Hexaware’s IPO reflects not just strong fundamentals but also the optimism investors have in the Indian tech sector’s future potential.

Investor Sentiment and M&A Growth

The EY report also pointed to a significant increase in mergers and acquisitions (M&A) volumes, which hit an all-time high during the same period. This surge in M&A activity further validates the overall positive sentiment within India's financial ecosystem, suggesting that investors are confident not only in public equity markets but also in private capital and strategic consolidation.

According to analysts, this rise in M&A deals is largely driven by sectoral consolidation, digital transformation, and global interest in India’s economic stability. These factors have combined to create an environment where corporate growth is being fuelled by both organic expansion and strategic tie-ups.

Retail Participation and Capital Market Depth

A striking trend from Q1 2025 has been the rise in retail investor participation in IPOs. With increasing financial literacy, digital access to investment platforms, and favourable macroeconomic conditions, more individuals are now engaging with capital markets.

This growth has been further bolstered by the presence of profitable IPOs, which offer a higher degree of predictability and return potential. Retail investors, once sceptical due to concerns over underperformance or post-listing volatility, are now finding confidence in the market’s consistency and oversight.

India's Position in the Global IPO Ecosystem

India’s 22% share of the global IPO market in Q1 2025 is a clear indicator of its increasing influence on the global financial stage. With economic reforms, digital infrastructure, and regulatory transparency, India has become a preferred listing destination for both domestic and international companies.

The findings from the EY IPO report reiterate that India’s capital markets are maturing, offering a balance of growth opportunities and regulatory safeguards. While global markets remain volatile due to geopolitical tensions and interest rate uncertainties, India continues to stand out as a beacon of stability and growth.

Deal Size and Capital Raising Trends

Another critical highlight from the report is the increasing average deal size, which points to the quality and scale of businesses coming to market. Companies are raising larger sums of money, and more investors are willing to back these businesses, confident in their scalability and return on investment.

Compared to previous years, the average IPO size in Q1 2025 has increased substantially, with more listings crossing the Rs 500 crore mark. This is a positive sign, as larger IPOs tend to draw more institutional attention, improving overall market liquidity and post-listing stability.

Conclusion: Optimism Ahead

Market experts quoted in the EY report remain optimistic about sustained IPO momentum through the rest of 2025. With India’s GDP growth projected to remain strong and consumption-led growth continuing across sectors, the primary market outlook appears resilient.

The technology, healthcare, and green energy sectors are expected to see more IPO activity in the coming quarters. Furthermore, with a robust regulatory ecosystem, favourable investor sentiment, and continued digital innovation, India is well on its way to becoming a global leader in equity capital markets.

In conclusion, India’s strong performance in Q1 2025 IPO activity, highlighted by the Rs 23,844 crore raised, Hexaware’s record-breaking IPO, and the increase in profitable listings, reaffirms the country's status as a key player in the global IPO ecosystem. The findings of the EY IPO report will serve as a benchmark for market watchers, investors, and policymakers, providing insights into the evolving dynamics of the Indian financial landscape.

The Upcoming IPOs in this week and coming weeks are  Wagons Learning, Srigee DLM, Manoj Jewellers.

The Current active IPO are Kenrik Industries,Arunaya Organics, Ather Energy, Iware Supplychain Services.

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