The Indian primary market is expected to witness a massive fundraising spree, with over $50 billion worth of Initial Public Offerings (IPOs) anticipated to hit the market over the next 12-18 months. This surge in IPOs is driven by both private equity exits and fresh fundraising by Indian corporates, which will test the market’s appetite and resilience. Gautam Sinha Roy, Chief of Equity and Fund Manager at ICICI Prudential Life Insurance, believes that investor selectivity and earnings delivery will be crucial as this flood of new paper hits the market.
The market has seen some volatility in the last year due to domestic slowdown and global uncertainties, but the medium-to-long term outlook remains positive due to stable macro conditions and economic recovery. The significant equity supply from promoters and private equity firms has kept the market in a tight band, and further upside is expected to be limited by increasing valuations.
IPOs have picked up recently, with over $20 billion raised so far in FY26, and a strong pipeline of companies seeking to raise over $50 billion through the coming year. Strong retail inflows are helping absorb this supply, leading to heightened activity in both the primary and secondary markets. The June quarter results have shown positive traction, with an over 10% year-over-year growth in aggregate earnings so far.
The current equity market rally is supported by strong domestic liquidity, with retail inflows at record highs, and earnings fundamentals. The government’s spending on infrastructure, social support, and tax incentives are supporting growth, and the RBI’s pro-growth stance is expected to drive credit-led growth later this year. The corporate bond market has seen strong growth, reaching record annual issuances of ₹9.5 trillion, driven by a 100-bps rate cut.
Pockets of opportunities are emerging in select sectors and themes, despite broader market concerns. Large financials offer good value with improving growth prospects, while discretionary remains a key overweight, with expectations of a consumption revival in H2-FY26. Healthcare is another area of opportunity, with strong growth visibility across hospitals and pharma companies. Within Industrials, specific plays like aviation and electronics manufacturing offer structural long-term growth.
In the small and midcap space, a selective, fundamentals-driven approach is essential, focusing on earnings visibility, cash flows, management quality, and avoiding overhyped IPOs that lack fundamental strength. The focus should be on companies with strong fundamentals, healthy balance sheets, and leadership in emerging and scalable spaces, available at fair valuations. Opportunities are currently found in select financiers, consumer durables, affordable housing financiers, mid-sized renewable power producers, healthcare, hospitality, mid-sized internet, and IT companies.