Synopsis: The IPO market in India presently generates a value of ~$20B, and as per JP Morgan, the continued strength of technology listings coupled with expected foreign inflows, these trends could propel India to a $10T market capitalization within the next five years.
There is a major reshuffle in India due to its IPO boom; massive yearly listings of $20Billion are becoming quite a regular sight. However, is it possible that this very pace will actually lead to a market cap of $10 trillion for India? In this article, we will try to understand the catalysts that might push for this economy boost.
About the Market
India’s IPO market is undergoing a significant transformation where yearly public listings are now regularly around $20 billion, a figure that JP Morgan considers to have established a new baseline for India.
With the fundraising through new issues in the IPO market already at $21 billion this year, equal to last year’s total, the country is anticipated to go beyond $23 billion by the end of the year. Besides, huge forthcoming issues such as ICICI Prudential AMC’s proposed Rs. 10,000 crore IPO are further energising the primary market pipeline.
Abhinav Bharti of JP Morgan pointed out that the yearly IPO run rate of $20 billion is expected to be maintained in the next couple of years. Presently, nearly 20% of IPO subscriptions is attributable to consumer-tech and new-age firms, and this proportion may increase over 30% in the next five years. He also cited that there are about 20 well-capitalised startups that are on the path of initial public offerings, and out of which four to five will each potentially raise over $1 billion, thereby accounting for close to $8 billion in total.
The investor’s eagerness for new-age IPOs has been better, as a result of several recent issues trading at a premium; however, Bharti mentioned that a major part of the IPO volume this year has been due to offer-for-sale (OFS) transactions. This portrays a deceleration in private-sector investments and less raising of funds through QIPs, which have fallen from $22 billion last year to only $10 billion in 2025. Consequently, the overall equity capital market activity has not been very vibrant.
JP Morgan forecasts the total equity issuance for 2025 to be in the range of $65 billion, which is a decrease from $72 billion in 2024. Nevertheless, the future remains bright. The company expects a turnaround in foreign portfolio inflows in the coming year, coinciding with the valuation improvement.
India is increasingly becoming a safe investment market, particularly at a time when the US markets are largely influenced by AI-led momentum. Apart from the IPO market, India’s domestic capital markets are also set for substantial growth. According to Nitin Maheshwari of JP Morgan, India’s combined market capitalisation will double to $10 trillion over the next five years, thereby becoming the world’s third-largest market after the US and China.
On the M&A side, outbound transactions are on the rise as Indian enterprises have the advantages of strong balance sheets, low debt, and ambitious plans globally. As for the inbound side, the Japan and Middle East interest remains high, particularly in the financial services sector.
Thus, it has been estimated that if India were to maintain the present trends, such as continuous $20 billion IPO activity, a robust pipeline of large new-age listings, and increasing foreign inflows, the country could achieve a market capitalisation of $10 trillion. In spite of less QIP activity, JP Morgan is of the opinion that these factors collectively are the main drivers of India’s journey to be ranked as the third-largest equity market globally.
Written by Satyajeet Mukherjee
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