Key Details
The SEBI Annual Report 2025–26 shows Indian capital markets becoming larger, more domestically funded and geographically dispersed. However, the composition of IPO fundraising and the difference between institutional and direct retail participation remain important for interpreting this growth.
Market Development | What The Report Shows |
|---|---|
Global IPO position | India ranked first globally by number of IPOs and third by funds raised. |
IPO activity | 366 IPOs raised ₹1.89 lakh crore, compared with 320 IPOs raising ₹1.72 lakh crore in 2024–25. |
Mainboard IPOs | 109 issues raised approximately ₹1.8 lakh crore, an 8.9% increase in funds mobilised. |
Public equity mobilisation | IPOs, follow-on offers and rights issues together raised a record ₹2.3 lakh crore, up 11.7%. |
Foreign investment | Foreign Portfolio Investors recorded net outflows of approximately ₹1.53 lakh crore. |
Domestic investment | Domestic Institutional Investors made record net purchases of ₹8.5 lakh crore. |
Changing ownership | DII holdings in NSE-listed companies reached 17%, exceeding FPI holdings of approximately 15.8%. |
Mutual funds | Assets under management rose 12.2% to ₹73.7 lakh crore, while unique investors increased to 6.1 crore. |
Systematic investment | Active SIP accounts reached 10.45 crore and average net monthly contributions rose 25.8% to ₹16,413 crore. |
Geographical spread | Tier II investor numbers increased 37.6%, while Tier III cities accounted for 55% of the mutual-fund investor base. |
India’s IPO Market Expanded In Scale And Number
India’s 366 IPOs included both mainboard and SME listings. Mainboard IPOs raised approximately ₹1.8 lakh crore, while the median mainboard issue size increased from ₹740 crore to ₹760 crore.
The composition of fundraising provides a more qualified picture:
214 fresh-issue-only IPOs raised ₹21,866 crore.
19 offer-for-sale-only IPOs raised ₹50,849 crore.
133 combined issues raised ₹1,15,901 crore through a mixture of fresh shares and shareholder sales.
An IPO may therefore serve two purposes: providing new capital to a company and enabling existing shareholders to sell their holdings. India’s global ranking demonstrates the scale of listing activity, but the amount raised cannot be treated entirely as new productive capital entering businesses.
SEBI also revised rules relating to large issuers, anchor investors, pre-IPO holdings and employee stock options to reduce listing barriers while retaining disclosure and public-shareholding requirements.
Domestic Institutions Absorbed Heavy Foreign Selling
Markets faced record net foreign portfolio outflows of approximately ₹1.53 lakh crore during 2025–26. The withdrawal reflected global risk aversion, geopolitical uncertainty, high crude-oil prices, rising overseas yields and rupee depreciation.
Domestic institutions simultaneously invested a record ₹8.5 lakh crore. By March 2026, their shareholding in NSE-listed companies had risen above that of FPIs.
Domestic flows provided an important counterweight but did not insulate markets completely:
the Nifty 50 ended the year 5.1% lower;
its decline was approximately 13.9% in US-dollar terms; and
market capitalisation declined to ₹411.6 lakh crore.
The evidence therefore points to a broader domestic funding base—not immunity from international financial conditions.
Mutual Funds Are Channeling Household Savings Into Markets
Mutual-fund AUM reached ₹73.7 lakh crore, more than double its level five years earlier. Individuals represented 97.7% of folios and held 58.3% of industry assets.
This growth helped domestic institutions become a larger source of market capital. However, three forms of participation should be distinguished:
direct retail investors buy securities themselves;
mutual-fund investors place money in professionally managed pooled portfolios; and
DIIs include mutual funds, insurance companies, pension funds and other Indian institutions.
Account numbers also do not correspond directly to individual investors. A person may maintain multiple demat or SIP accounts.
SEBI’s nationwide survey found that only 9.5% of households participated in securities markets, despite 63% being aware of at least one market product. Participation was estimated at 15% among urban households and 6% among rural households.
What Is an Offer for Sale?
An Offer for Sale allows existing shareholders to sell their shares through an IPO. Unlike a fresh issue, the proceeds normally go to the selling shareholders rather than the company. Many IPOs combine an offer for sale with the issuance of new shares.
Policy Relevance
Domestic savings are becoming a larger source of market stability, reducing—but not eliminating—exposure to volatile foreign flows.
IPO count and capital formation are not identical: Evaluating the market requires separating fresh capital raised by companies from shareholder exits.
Institutionalised savings matter: Sustained mutual-fund and insurance participation may provide more stable capital than short-term or leveraged retail trading.
Wider geographical reach requires suitable products: Growth beyond major cities must be accompanied by transparent costs, comprehensible disclosures and effective grievance redressal.
Market resilience should be tested across cycles: DII support during one year does not establish how household contributions and redemptions will behave during a prolonged downturn.
Follow the Full Report Here: SEBI Annual Report 2025–26