Expert view: What a booming IPO market means for Indian investors

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The Indian IPO market is experiencing a massive boom. On 9 September alone, six companies launched IPOs to raise a combined ₹4,510 crore. Looking at the broader picture, 74 companies have already raised an impressive ₹80,853.54 crores through IPOs up to 12th September 2026. Apart from these mainboard IPOs, 132 SME IPOs have raised ₹7,848.88 crores up to 12th September 2026.
The momentum is set to accelerate further with two highly anticipated mega-issues:
NSE's mega IPO: Scheduled to open on the 17th of this month, targeting a record-breaking raise of approximately ₹26,000 crore.
Reliance Jio: Expected to hit the market within the next two months.
Both entities operate in highly profitable, high-growth sectors with exceptionally bright long-term prospects. Driven by these mega-issues, the market is on track for an all-time record capital raise of about ₹2.4 lakh crore in 2026.
What does this IPO surge mean for investors, corporations, and the broader economy?
When high-quality companies with robust management and strong growth prospects enter the primary market, they naturally attract investors. If these companies perform well post-listing, wealth is generated through the stock market, benefiting ordinary retail investors. Ultimately, an efficiently functioning capital market ensures that capital flows into its most productive uses, accelerating overall economic growth.
Historically, the primary market thrives when the secondary market is bullish. However, a fascinating characteristic of the current IPO boom is that it is occurring despite a weak secondary market. As of September 16th, the Nifty index is down 11.2% year-to-date (YTD), yet the IPO market continues to surge.
Several factors are fuelling this decoupling and drawing capital into new listings:
Outperforming returns: Between June and September 7th, the average return from fresh IPOs stood at roughly 22%. These strong gains offer a stark, attractive alternative to the negative returns of the broader Nifty index.
Institutional pivot: Foreign institutional investors (FIIs), who had net-sold equity worth ₹2.84 lakh crore in the broader market up to September 7th, have simultaneously invested ₹36,000 crore specifically into IPOs.
Strong domestic liquidity: Inflows into mutual funds via systematic investment plans (SIPs) remain incredibly resilient, consistently exceeding ₹30,000 crore monthly over the last six months.
While the data paints a bullish picture, there is a visible flip side: many retail investors are rushing into IPOs blindly, ignoring fundamental valuations. To invest safely and profitably, investors must critically evaluate:
Valuations: Is the IPO priced reasonably relative to its earnings?
Management quality: Does the leadership team have a clean, proven track record?
Industry dynamics: Is the company operating in a sustainable, high-growth sector?
The bottom line: Rather than treating IPOs as short-term vehicles for quick "listing gains," investors should aim to hold high-quality stocks for the long term. True wealth creation is a marathon, not a sprint.
While the IPO market booms, the secondary market is performing poorly with a -11.2% YTD return in Nifty. The tepid performance of the mega-caps is responsible for this dismal performance.
The market is being weighed down by the elevated crude price (Brent crude at $108) and high US bond yields, with the benchmark US 10-year at about 5 %.
Even though India’s fundamentals have improved with the 7.8% Q1 FY27 GDP growth rate and improving prospects for corporate earnings, a sustained rally will happen only when crude prices and US bond yields cool down.
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Disclaimer: The author of this article is Chief Investment Strategist, Geojit Investments. The views and recommendations expressed are strictly those of the author, not Mint. This article is for educational purposes only and does not constitute investment advice. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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