Macro Analysis
Following a period of global uncertainty in 2025, including tariff-related concerns, market sentiment in India improved after the Union Budget 2026, supported by progress on trade engagements with key regions such as the EU and the US. This led to a recovery in benchmark indices, with the Nifty approaching the 26,000 level in February 2026.
However, the momentum was impacted by the onset of geopolitical tensions in West Asia, which resulted in a broad-based correction across global markets, driven in part by concerns around disruptions in oil supply and other key resources.
Exchange rate and oils prices: Impact on the Indian Economy
- During the fiscal 2026, the US dollar appreciated significantly, registering an increase of over 10% during the financial year.
- This had a mixed impact on the Indian economy, while export-oriented sectors, particularly IT services, benefited from higher realizations, the rise in crude oil prices led to increased import costs.
- Given India’s dependence on oil imports, this resulted in higher foreign exchange outflows and exerted pressure on the overall macroeconomic environment.
Market activity for the year 2026
- Despite these disruptions, India’s primary market activity remained busy, with 15 listings during the period, of which nine were in March alone on the mainboard. While average issue sizes were relatively smaller, the overall capital raised was higher compared to the corresponding period in 2025
- With benchmark indices already rebounding by ~10% following a brief correction, investors appear poised to deploy additional capital at attractive valuations, supporting a constructive near-term market outlook.
Looking ahead, market activity is expected to remain sensitive to global macro developments and currency volatility, while improving domestic fundamentals and sustained investor participation could support continued, albeit measured, primary market issuance.
IPO Insights
More Listings, Leaner Deals: 2026 IPO Landscape
Year 2025 vs Year 2026
Despite global uncertainty and risk aversion, 2026 witnessed a resilient mainboard IPO market, with 15 companies listed, collectively raising ~INR 17,000 crores. This was broadly in line with 2025, when 10 listings raised a similar amount.
While overall capital raised was comparable across both years, the composition differed meaningfully. 2025 was characterized by larger issue sizes, with offerings such as Hexaware Technologies contributing significantly to aggregate proceeds. In contrast, 2026 saw a greater number of smaller-sized issues, with the largest listing being approximately INR 3,000 crores.
March Listings Defy Challenging Market Sentiment
January and February each witnessed three listings each, with average issue sizes of INR 1,588 crores and INR 1,336 crores, respectively. March saw a higher number of listings (nine), the average issue size declined to INR 895 crores, driven by a higher proportion of smaller offerings.
Notably, despite several adverse global developments and heightened market uncertainty, nine companies successfully accessed the capital markets and completed listings in March amid challenging sentiment.
Primary issue & OFS:
All three months witnessed a balanced mix between primary issuances and OFS, with OFS contributing ~62% of the total funds raised. Of the total issuances, three companies opted for a pure OFS, two for a fully primary issue, while the majority (10 companies) raised funds through a combination of both.
Sectoral IPO Landscape 2026: IT contributes amidst uncertainty, while Coal India Subsidiaries Take Center Stage
Information Technology: Fractal Analytics and Amagi Media Labs debuted in 2026 with issue sizes exceeding INR 1,500 crores each, making them relatively larger compared to the average issue size of ~INR 1,000 crores during the year. Both offerings comprised a balanced mix of primary issuance and OFS, with a significant portion of the primary proceeds earmarked for technology and cloud infrastructure investments, R&D, and sales and marketing initiatives.
Services: The services sector saw notable listings during the quarter, led by Shadowfax, reflecting strong momentum in logistics and last-mile delivery. Innovision also listed during the period, adding further depth to the transportation segment.
Subsidiaries of Coal India Limited: Two subsidiaries of Coal India Limited — one of the 11 Maharatna Public Sector Undertakings (PSUs) under the Department of Public Enterprises — were listed during the quarter:
i. Bharat Coking Coal
ii. Central Mine Planning Design
Both offerings were of significant size, each exceeding INR 1,000 crores, highlighting sustained investor interest in PSU-backed entities.
Healthcare: After a strong run of mid-sized IPOs in 2025 (11 companies), Q1 2026 witnessed a pause, with only one listing in the segment, Gaudium IVF and Women Health.
Capital goods: Capital goods, which emerged as the sector with the highest number of listings in both 2024 and 2025, spanning mid-sized, and small companies, continues to outperform in terms of quantum of listings (2 in 2026).
The Automobile & Auto Components and Power sectors each saw a sole listing during the period, with SedeMac Mechatronics Limited and Clean Max Enviro Energy Solutions Private Limited being the other significant issues of the year.
IPO in Pipeline
Large Approved Pipeline Awaits Market Windows for Launch
As of the date of this publication, approximately 222 companies that filed their DRHPs between 2024 and 2026 are awaiting listing. A significant concentration of this volume, nearly 170 filings, occurred during the heightened market activity of 2025 (excluding withdrawals, SEBI-returned DRHPs, and companies that filed and listed in 2025), making it one of the busiest periods for India’s primary markets in recent history.
Of these, approximately 16 companies that filed their DRHPs in 2024 and subsequently received SEBI approval during 2024 and early 2025 (January–February) have seen their approvals expire. These companies would need to reinitiate the process should they intend to proceed with their IPO plans.
Currently, ~143 companies hold active SEBI approvals. However, these companies are required to launch their IPOs within the stipulated timeline, failing which the approval may lapse.
~51 companies received SEBI approvals in December 2025 and January 2026 (expiring ~December 2026 & ~January 2027). Under normal circumstances, these companies would have been expected to list by mid-March / April; however, the timelines have been delayed due to prevailing market conditions.
In addition, around 63 companies, primarily those that filed DRHPs in December 2025 (~22 filings) are awaiting SEBI approval.
If capital market activity remains subdued in the coming months, leading to fewer IPO launches, companies approaching the end of their 12/18-month validity window for SEBI approval may face a heightened risk of expiry of their offer documents, necessitating a restart of the process.
One-time relaxation with respect to validity of SEBI Observations:
In this context, SEBI has provided a one-time regulatory relaxation by extending the validity of observation letters expiring between April 1, 2026 and September 30, 2026, up to September 30, 2026. This relief is expected to benefit issuers whose approvals were nearing expiry, allowing them additional time to access the capital markets without undergoing a fresh filing process, subject to compliance with prescribed conditions.
This measure alleviates immediate timing pressures on eligible companies, reduces duplication of regulatory efforts, and provides flexibility to align IPO launches with improved market conditions.
Closer Look: Use of Proceeds
Follow the Money: What IPO Proceeds Reveal About Corporate Priorities
The deployment of funds raised in year 2026 highlights a clear trend towards balance sheet strengthening through capex and repayment of loans.
- Capital expenditure (30%) constituted the largest share and one of the notable trend is the increase in spends on technology, cloud infrastructure, network infrastructure, which contributed to over 50% of the overall capex spends in the quarter.
- Loan Repayment (24%) accounted for over one-quarter of total capital raised, underscoring issuers’ emphasis on deleveraging and reducing interest costs.
- Funding Working Capital (21%) includes increasing the capital base to meet the future capital requirements for finance companies, lease payments, branding & marketing cost, spending of research & development among others.
The balance of the funds was directed towards General Corporate Purposes and unidentified acquisition (15%). An interesting trend observed during the quarter was the absence of capital allocation towards subsidiary investments, except for loan repayments.
On an average, companies incur close of 6% of the primary issue process as issue expenses.
Overall, nearly 75% of the total proceeds were channeled into core business priorities – capital investment, debt reduction and working capital efficiency, signaling a strong focus on sustainable growth and financial prudence by issuers during the first quarter of 2026.
Investor Demand & Listing Performance
IPO Momentum Slows After a Strong 2025 Run
The second half (H2) of 2025 witnessed strong traction in IPO subscriptions, with issues averaging approximately 38x oversubscription. However, 2026 has seen a moderation in participation, with February and March witnessing subscriptions of only approximately 2x, leading to a corresponding decline in listing gains.
Qualified Institutional Buyers (QIBs)
QIB subscription levels remained robust from May 2025, consistently exceeding 40x over the subsequent eight months.
However, after a strong start in January 2026, participation saw a sharp decline from February onwards, primarily driven by heightened global uncertainty impacting investor sentiment.
Non-Institutional Investors (NIIs)
The NII segment largely moved in tandem with QIBs, mobilizing comparable levels of capital across most months, reflecting broad-based participation from institutional and high-net-worth investors.
While February saw one of the lowest levels of interest, participation recovered in March 2026.
Overall subscription
Overall subscription levels highlight a shift from strong, broad-based participation in 2025 to a more cautious investment environment in 2026.
IPO Listing Gains Moderate Sharply in 2026 Compared to 2025
- As reflected in the average subscription multiples, the decline in overall subscription levels led to a corresponding moderation in average listing gains in 2026.
- February and March witnessed one of the lowest levels of investor participation, with each month seeing subscriptions of only ~2x, and listing performance mirrored this weak sentiment.
- Approximately two-thirds of the IPOs listed below their issue price (based on closing price on listing day), indicating a negative market environment.
- While around 33% of companies listed at a premium, standout performances such as Bharat Coking Coal Limited, which delivered listing gains of over 75%, highlight selective investor interest despite the broader softness
