India’s primary market momentum shows little sign of fatigue. According to senior bankers at Goldman Sachs, JPMorgan, and Kotak Mahindra Capital, the country’s IPO fundraising in 2026 could either match or exceed current-year levels, potentially setting a record for the third year in a row. The projections underscore how structural shifts in domestic capital flows are increasingly insulating India’s equity markets from global volatility cycles.

Over the past two years, India has emerged as one of the most active IPO markets globally. This surge has been driven less by foreign speculative capital and more by sustained inflows from domestic mutual funds and retail investors. Monthly SIP contributions, rising demat participation, and greater familiarity with equity investing have created a stable demand base that companies are increasingly willing to tap.

This domestic liquidity cushion has allowed India’s primary market to thrive even as global IPO activity remained uneven due to higher interest rates and geopolitical uncertainty. As a result, India now stands out among emerging markets as a consistent capital-raising destination.

What is changing

Looking ahead to 2026, leading dealmakers expect this momentum to continue. Kotak Mahindra Capital and Goldman Sachs estimate that IPO proceeds next year could reach as much as $25 billion, around 14 percent higher than current-year levels. JPMorgan Chase expects annual fundraising to remain above $20 billion for the next few years, signaling confidence that the cycle is not near exhaustion.

These three banks together control close to one-third of India’s IPO market, giving their forecasts significant weight. The optimism is supported by a robust pipeline. More than 90 companies have already received regulatory approval for public issues, while a similar number have filed draft documents and are awaiting clearance.

The expected lineup includes several high-profile names such as Jio Platforms, backed by Mukesh Ambani’s Reliance ecosystem, the National Stock Exchange of India, Walmart-backed PhonePe, Temasek-backed Manipal Hospitals, and quick-commerce platform Zepto. The breadth of sectors-from digital payments to healthcare and market infrastructure-suggests that the IPO wave is no longer confined to niche growth stories.

Why it matters

A sustained IPO boom has broader implications for India’s capital markets. First, it deepens market breadth by bringing new-age businesses and large private enterprises into the listed space. Second, it strengthens India’s position in global equity allocations at a time when other emerging markets struggle with capital outflows.

Bankers also point to valuation dynamics turning more supportive. India’s equity valuation premium over global peers has fallen to its lowest level in four years, while absolute valuations are drifting back toward their five-year averages. At the same time, earnings growth expectations are improving. MSCI India constituents are projected to grow earnings by nearly 16 percent in 2026, sharply higher than the low single-digit growth estimated for the current year, according to Bloomberg Intelligence data.

This combination-moderating valuations and recovering earnings—could attract foreign investors who remain underweight on India, particularly if global rate cycles turn more accommodative.

Official views and market signals

Abhinav Bharti, head of India equity capital markets at JPMorgan, highlighted India’s relative appeal among emerging markets, noting that it remains one of the few offering strong and visible growth. He added that foreign investors are likely to increase allocations in 2026 as valuations become more reasonable.

From a domestic standpoint, regulators have continued to clear IPO proposals at a steady pace, indicating confidence in the market’s ability to absorb new supply. However, there has also been heightened scrutiny around disclosures and pricing, reflecting concerns about investor protection in an increasingly crowded issuance environment.

Business and market implications

For Indian markets, a steady IPO pipeline supports ancillary businesses such as investment banking, broking, exchanges, and asset management firms. It also reinforces the equity culture among retail investors, which has become a key stabilizing force during periods of global risk aversion.

Sectorally, bankers expect digital platforms and financial services to dominate issuance volumes, reflecting where private capital has been most active over the past decade. Healthcare and consumer-facing technology firms are also likely to feature prominently.

However, the quality of listings will matter. Roughly half of the IPOs launched this year are trading below their issue price, raising questions about pricing discipline and deal selection. This divergence suggests that while demand is strong, investors are becoming more discerning.

Bull vs Bear scenario

The bullish case assumes continued domestic inflows, stable macro conditions, and a recovery in corporate earnings, allowing India to absorb large-ticket IPOs without significant market disruption. In this scenario, India could further cement its status as the leading emerging-market destination for equity capital.

The bearish case centers on deal quality and external risks. Persistent underperformance of newly listed stocks could dampen retail enthusiasm. Additionally, delays in sensitive geopolitical or trade developments-such as India-US trade negotiations-could affect foreign investor sentiment and valuations.

Key risks

Key risks include IPO mispricing, market fatigue from excessive supply, global risk-off events, and regulatory tightening if investor protection concerns rise. While the pipeline is deep, sustaining confidence will depend on consistent post-listing performance rather than headline fundraising numbers alone.