- India’s primary market raised ₹2.01 lakh crore via 153 IPOs in FY26.
- Robust IPO activity persisted despite secondary market volatility and corrections.
- Stable Indian macroeconomics with strong GDP growth and contained inflation support IPOs.
India’s primary market has delivered a strong performance in FY26, underlining sustained investor confidence even as broader equity markets witnessed phases of correction and volatility.
According to a report by HDFC Securities, a total of 153 initial public offerings (IPOs) were launched during the financial year, collectively raising Rs 2,01,442 crore. The scale of fundraising highlights the continued depth of capital markets and the willingness of investors to back new-age and traditional businesses alike.
IPO Activity Remains Robust Despite Volatility
The strong IPO pipeline in FY26 comes at a time when secondary markets have experienced intermittent corrections, particularly in midcap and small-cap segments, reported IANS.
Despite this, the primary market has remained resilient. The report notes that investor appetite for new listings has held up, driven by long-term growth expectations around India’s economy and corporate sector.
The trend suggests that investors are willing to look beyond short-term volatility in listed markets and continue allocating capital to companies tapping the primary market.
Macro Fundamentals Provide A Strong Backdrop
A key factor supporting IPO momentum is India’s relatively stable macroeconomic environment.
HDFC Securities estimates real GDP growth at around 6.5 per cent for FY26-FY27, while nominal GDP is expected to expand by 10-11 per cent. These projections reinforce India’s position as one of the fastest-growing major economies globally.
Government spending continues to act as a significant growth driver. Capital expenditure is expected to account for nearly one-third of total government expenditure in FY27, supporting infrastructure development and allied sectors.
At the same time, inflation is projected to remain contained at around 4.5 per cent, while the fiscal deficit is targeted at 4.3 per cent, indicating a relatively balanced macroeconomic framework.
Also Read : 8th Pay Commission Update: Who Could Get Rs 10 Lakh Arrears And How
External Pressures Still Persist
While domestic indicators remain strong, the report flags ongoing external challenges that could influence market dynamics.
The Indian rupee continues to face pressure amid subdued foreign direct investment inflows and persistent foreign portfolio investor (FPI) outflows. A widening trade deficit has further contributed to currency weakness.
These factors have led to a gradual depreciation trend in the rupee since 2022, which could have implications for capital flows and investor sentiment going forward.
Earnings Growth Expected, But Uneven Across Sectors
Corporate earnings are projected to grow at around 10 per cent, according to the report, although performance is likely to vary across sectors.
Banks, consumer discretionary, metals and telecom are expected to witness gradual improvement, reflecting underlying demand and sector-specific tailwinds.
In contrast, the energy sector may face some pressure, potentially due to volatility in global commodity prices and margin dynamics.
The divergence in sectoral performance suggests that stock selection will remain critical for investors in the coming year.
Valuations Correct, But Still Elevated
Recent market corrections have led to a moderation in valuations, particularly in midcap and small-cap stocks.
However, the report notes that valuations in these segments continue to remain above long-term averages, indicating that pockets of the market may still be relatively expensive.
Benchmark indices, on the other hand, are approaching more historically attractive levels, which could provide opportunities for long-term investors.
Retail Investors Continue To Drive Participation
Retail participation has emerged as a defining feature of India’s equity markets in recent years.
The number of demat accounts has crossed 222 million, reflecting a steady expansion in the investor base. Active equity traders have also risen significantly, exceeding 1.48 crore as of February 2026.
Mutual fund inflows via Systematic Investment Plans (SIPs) remain robust, with annual contributions exceeding Rs 30,000 crore, according to the report.
This steady inflow of retail capital has helped provide stability to markets, even during periods of foreign investor outflows.
With macro fundamentals holding steady and retail participation rising, the outlook for the primary market remains constructive. However, investors will need to navigate global uncertainties and valuation concerns as they assess opportunities in the next phase of market evolution.
