India's initial public offering market is set for a significant expansion in 2026, with potential offerings worth $25-30 billion, according to Gaurav Sood, Managing Director and Head of Equity Capital Markets at Avendus Capital. This projection represents a substantial increase from the current market activity, which has maintained approximately $20 billion worth of listings in each of the past two years.

Market Growth Drivers

The anticipated growth is underpinned by a strong and diversified pipeline of companies across multiple sectors. Sood emphasized that the market's positioning reflects both depth and breadth in the types of companies preparing for public listings.

Sector-Wise Opportunities

New-age companies, particularly in fintech and consumer tech, are expected to continue dominating IPO activity by sector. These technology-led listings represent the core of the market momentum, reflecting India's digital transformation and the maturation of its startup ecosystem.

Beyond technology, several other sectors are emerging as attractive candidates for public markets:

• Renewables and Energy: Growing interest in clean energy companies
• REITs and InvITs: Continued relevance as investment vehicles
• Financial Services: Select firms showing strong fundamentals
• Healthcare: Both multi-specialty and single-specialty companies gaining traction

Multinational Listings Trend

A key structural theme shaping the IPO landscape is the increasing number of multinational companies choosing to list their India businesses separately. Sood characterized this as a "multidecadal theme" rather than a short-term trend, highlighting India's rising importance for global corporations as both a growth and profit center.

This development reflects the strategic value that international companies place on their Indian operations, with many viewing separate listings as a way to unlock value and provide focused exposure to India's growth story.

Investor Participation Outlook

Regarding investor participation, Sood expects foreign institutional investor selling to moderate somewhat in 2026. Notably, he pointed out a distinction between primary and secondary markets, with primary markets continuing to attract strong FII interest, particularly in large, high-quality IPOs.

This sustained FII participation in primary markets reinforces confidence in India's long-term growth story and suggests that international investors remain committed to participating in new opportunities despite any secondary market volatility.

The projected growth in India's IPO market reflects broader economic confidence and the maturation of various sectors that are now ready for public market participation. The combination of domestic growth stories and international companies recognizing India's strategic importance creates a robust foundation for the anticipated market expansion in 2026.

India's IPO market achieved unprecedented heights in 2025, with companies raising a record ₹1.95 trillion and generating $417 million in underwriting fees for investment banks. The surge represents a significant increase from the previous year's record of ₹1.73 trillion, according to LSEG data cited by Bloomberg. This boom was fueled by an expanding retail investor base, sustained institutional demand, and regulatory reforms designed to streamline the listing process for companies.

Fee Structure Shows Marked Improvement

The investment banking sector witnessed a notable shift in pricing dynamics, with average underwriting fees climbing to 1.86% of deal value compared to 1.67% in the previous year. This rate now surpasses Hong Kong's typical 1.5% fee structure, marking a departure from India's historical reputation as a low-fee capital market. The increase reflects strengthened pricing power among bankers after years of aggressive competition that had compressed margins.

Domestic Banks Dominate Fee Rankings

Axis Bank emerged as the leading IPO adviser by fee income, earning $34.3 million in 2025. Kotak Mahindra Bank secured the second position with $32.7 million in fees, while IIFL Capital Services rounded out the top three domestic players with $30.2 million, representing a surge of more than 90% from the previous year.

Global Banks Maintain Strong Presence

Among international players, Citi led with $27.1 million in underwriting fees, followed by JPMorgan at $22.6 million. The fee distribution demonstrates the continued importance of global banks in India's capital markets, particularly for large-scale offerings. Motilal Oswal Financial Services recorded the most dramatic growth, with fee income increasing nearly fourfold, while Morgan Stanley and State Bank of India also featured among the top earners.

Market Dynamics and Future Outlook

The record performance helped reverse years of fee compression that had plagued the investment banking sector. Intense competition had previously forced banks to undercut rivals to secure mandates, often at the expense of profitability. The strong deal flow in 2025 provided banks with enhanced negotiating power and reduced the need for aggressive fee discounting.

Despite the impressive growth, India remains relatively inexpensive for issuers compared to global standards, particularly for large offerings. The improved fee structure reflects a gradual maturation of India's capital markets, supported by robust investor demand and regulatory initiatives that have streamlined the IPO process. The combination of these factors positioned India among the world's busiest IPO markets in 2025, creating a more sustainable fee environment for investment banks.