Smaller deal sizes, valuation discipline sustain India’s record IPO rush

“The record number of IPOs despite weakness in the secondary market reflects the resilience of India’s primary market,” said Pranav Haldea, managing director of Prime Database Group. “However, the underlying trend is one of issuers recalibrating to market realities.”

After a relatively subdued first six months of calendar 2026, IPO activity picked up pace in the September quarter, with share sales of ₹87,680 crore from 63 listings compared with ₹21,500 crore from 23 listings in the first two quarters.

However, according to data from Uniqus Consultech Inc., of the 58 third-quarter IPOs that included the sale of fresh shares, 32 reduced the issue size by an average of more than 20%—some scaling back by as much as 50%—20 issuers kept their offer sizes unchanged and six increased them.

“This sharp decline in average issue size, along with widespread downsizing, suggests that investor appetite is increasingly price-sensitive and selective,” Haldea said.

Changing benchmarks

The shift reflects a fundamental change in institutional investor behavior during pre-IPO roadshows. Facing secondary market weakness, institutional buyers are benchmarking offer valuations against current secondary market multiples rather than peak valuations commanded by listed peers in 2024 and 2025, K Raghuram, partner, accounting & reporting consulting at Uniqus, told Mint.

“This is recalibration, not compromise,” Raghuram said. “Issuers chose market acceptance over the valuations they had aimed for earlier. The roadshow has become the reality check, and the question it asks is simple: Is the valuation aligned with today’s market? Bankers turn that feedback into the final offer, but the push comes from investor appetite.”

Amid valuation discipline, regulatory deadlines and private equity exit mandates, conflict and geopolitical uncertainty early in 2026 delayed companies holding valid IPO approvals from the Securities and Exchange Board of India (Sebi). A subsequent one-time relief measure by Sebi allowed these companies to complete listings by September, preventing offer documents from lapsing for nine of the third quarter's 63 listings.

Faced with mandatory fund lifespans and steady domestic institutional inflows today, promoters chose to lock in guaranteed liquidity rather than delay offerings in hopes of a secondary market rerating.

“Volume and value have separated, but I would read that as partly structural and partly cyclical,” Raghuram said. “India's pipeline is broadening with more mid-sized, sector-specific companies with credible governance. Most promoters are accepting downsized raises as a pragmatic reset. Listing is a means to an end, not the end itself.”

Strong listing

On the flip side, late-stage IPO size cuts contributed directly to stronger post-listing performances. Average listing price changes rose from a negative 1.44% in the first quarter to about 20% in the third quarter, with 49 of the 63 offerings closing above their issue prices.

Both Haldea and Raghuram said that historically, primary market activity surges during the fourth quarter of a calendar year, skewing the average to the heavier side. There could be a meaningful increase in capital raised in the December quarter, when Jio Platforms and Zetwerk Manufacturing Businesses Ltd listed. The pipeline for the quarter includes Cult.fit Ltd and Razorpay Software Ltd.

According to Prime Database, as many as 124 companies have valid Sebi approvals to launch their public issues, collectively worth ₹2.45 trillion, and another 130 companies are awaiting regulatory clearance after filing their offer documents.

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.