Will India’s Capital Market Achieve Rs 4 Lakh Crore in Capital Formation by 2026?
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Synopsis
India's IPO market is on track to facilitate a remarkable Rs 4 lakh crore in capital formation by 2026. This transition into a structurally robust phase showcases India's position as a global leader in IPO activity. The report reveals significant shifts in investor engagement and market dynamics, making it a key focus for stakeholders.
Key Takeaways
- India's IPO market is set for Rs 4 lakh crore in capital formation by 2026.
- Significant growth has been observed in various IPO issue sizes.
- Investor engagement has grown geographically across India.
- Foreign portfolio investors are playing a crucial role in market stability.
- The market reflects a structural maturity rather than cyclical ups and downs.
New Delhi, Dec 29 (NationPress) India’s IPO market has transitioned into a structurally robust phase and has become the global frontrunner in terms of deal volume, expected to enable approximately Rs 4 lakh crore in capital formation by 2026, according to a report released on Monday.
The analysis from Pantomath Capital indicates that the equity capital markets in India have evolved over the past five years, transforming from a primarily cyclical fundraising method into a more profound and resilient platform for capital generation.
The firm emphasized a pivotal turning point for the IPO landscape following 2020, revealing that mainboard IPOs exceeded 100 in 2025 for the first time since 2007.
In the calendar year 2025, India topped the global charts in terms of the number of IPOs and ranked among the top three nations for IPO proceeds. Unlike other markets that are often bolstered by a few major listings, India’s IPO sector demonstrated consistent activity across various issue sizes, with notable growth in the Rs 100–500 crore and Rs 1,000–2,000 crore categories, as detailed in the report.
The issuance volumes significantly increased across both mainboard and SME segments, indicating a shift from opportunistic listings to sustained capital mobilization and broad participation from issuers.
“India’s IPO market today reflects structural maturity rather than cyclical exuberance. The concurrent rise in issuance volumes, average deal sizes, and institutional discipline signifies a lasting framework for capital raising,” commented Mahavir Lunawat, CMD of Pantomath Capital.
“With regulatory frameworks becoming more robust, the visibility of upcoming IPOs is promising. We predict a pipeline worth over Rs 4 trillion for IPOs in 2026, supported by substantial domestic involvement and selective global investments,” he added.
Investor engagement has expanded across India, with Mumbai contributing around 37% and 38% of retail and HNI applications, respectively.
Significant interest was observed from regions in Gujarat including Ahmedabad, Surat, Rajkot, Bhavnagar, and Mehsana. The report also mentioned an increase in engagement from emerging non-metro areas like Bhilai, Kendrapara, and Hisar.
Moreover, foreign portfolio investors continued to enhance global credibility in 2025 through targeted participation, which aided in disciplined price discovery, the report stated.
Point of View
It's evident that India's IPO market is not merely riding a wave of cyclical trends but is evolving into a mature and resilient framework. The anticipated Rs 4 lakh crore in capital formation reflects a promising future for investors, businesses, and the economy as a whole. This growth will likely attract more domestic and international participants, reinforcing our belief in India's economic potential.
NationPress
08/01/2026
Frequently Asked Questions
What is the expected capital formation in India by 2026?
India is poised to achieve approximately Rs 4 lakh crore in capital formation by 2026, according to a recent report.
How has India's IPO market changed recently?
India's IPO market has transitioned to a structurally stronger phase, becoming a global leader in deal volume and showcasing significant growth across various issue sizes.
What regions are showing increased investor participation?
Regions such as Gujarat, including Ahmedabad and Surat, are showing notable investor participation, alongside emerging non-metro areas like Bhilai and Kendrapara.
What role do foreign investors play in India's IPO market?
Foreign portfolio investors have been actively contributing to India's IPO market, enhancing global credibility and supporting disciplined price discovery.
How many IPOs were registered in India in 2025?
India's mainboard IPOs surpassed 100 for the first time since 2007 in 2025.
