Rebounding Indian IPO market shows governance, preparation now define success
India’s capital markets have rediscovered their stride in 2025. In the first half of the year, companies raised around US$5.5 billion across 24 mainboard IPOs, a 45 percent increase from the same period last year. Nearly two-thirds of those issues listed at a premium, delivering average post-listing gains of 25 percent. The pipeline is strong as well, with 118 draft prospectuses filed by mid-year, pointing to more activity ahead.
Global comparisons highlight the scale of this rebound. India ranked fourth worldwide for IPO fundraising in the first half, with total proceeds of $6.1 billion across boards. The country also produced two of the world’s top ten IPOs so far in 2025: HDB Financial Services’ $1.5 billion deal and Hexaware Technologies’ $1.05 billion listing. Mid-market names such as JSW Cement, Schloss Bangalore and Ather Energy have also found success. Proposed regulatory easing around minimum public floats may further open the door to mega-listings in the months ahead.
For law firms, the shift has been significant. At Shardul Amarchand Mangaldas, Prashant Gupta says the rebound has broadened the scope of work and introduced new layers of complexity. “In general, at least at our firm, we work with a large number of sponsor-driven companies – this raises a different set of issues from an IPO perspective than Indian promoter-owned manufacturing companies,” he explains. “There are multiple stakeholders (founders, shareholders, directors), each of whom has their own goals for an IPO. Managing these issues can be time-consuming and there is no one-size-fits-all approach.”
That balancing act has only become more pronounced as market conditions have tightened. Even with solid domestic flows, issuers are finding pricing far trickier to secure. “Given the various macro-economic and geo-political issues prevalent globally, IPO pricing and completion is definitely more challenging than in 2024,” Gupta says. “While the domestic funds and capital markets remain robust, pricing and valuation for IPOs (particularly in financial services) remain questionable.”
The tension between robust investor demand and cautious valuations has created an environment where issuers must be better prepared. Gupta points out that even in successful transactions, achieving the right balance between these factors has become more nuanced than before.
Regulation, meanwhile, has acted as a stabilising force. Gupta stresses that constructive engagement from India’s capital markets watchdog has underpinned confidence. “SEBI has been proactive in acting on industry feedback,” he says. “While there has been increased regulatory scrutiny and focus on due diligence, that has only increased confidence in the equity markets in the last three to four years and we continue to see positive engagement from SEBI and the stock exchanges on various industry and market issues.”
For companies, however, the greatest stumbling block may be preparation. Gupta notes that many underestimate the amount of time required to be truly IPO-ready. “Being IPO ready involves a 6–12-month pre-transaction preparatory timeframe,” he explains. “In our experience, a number of companies jump into the IPO process without realising the time allocation from management required. Ironically, larger corporates that have larger in-house teams and perhaps have a better idea of the process, spend more time planning and prepping for an IPO, than companies that have smaller teams and management teams that have multiple workstreams.”
That lack of preparation can have ripple effects, forcing lawyers to resolve governance issues or disclosure gaps late in the process. Gupta emphasises that early planning is not just about ticking boxes but about building credibility with investors. Rushing to market without sufficient groundwork, he suggests, is increasingly out of step with investor expectations.
Governance itself has emerged as a decisive factor in the renewed market. With institutional investors pressing for higher standards, companies are expected to be more transparent than ever. Gupta highlights three areas where issuers should focus their attention: “Where there are related party transactions, companies need to explain this in detail in the prospectus – with scrutiny from proxy firms post listing, it is imperative that the legitimacy of these RPTs is established as part of the listing process,” he says. “Regulatory compliance is now more important than ever, especially for companies in regulated sectors such as NBFCs, fintech or insurance. Any pre-existing issues with the sectoral regulator should be cleared up before the IPO if possible. And finally, the importance of a robust board of directors with well-recognised audit firms cannot be overstated from an investor perspective, even for smaller companies.”
