In the first half of FY27, companies raised a record Rs 2.4 lakh crore through public equity markets, 75 per cent higher than the corresponding period last year. Mainboard IPOs alone accounted for Rs 94,200 crore across 78 issues, the highest first-half total on record. The pipeline remains substantial, with hundreds of companies seeking approval and planning to raise several lakh crores more. Yet, over the same six months, the Nifty 50 gained just 1.3 per cent, capped by a sharp 6 per cent decline in September.

SEBI chairman has described India’s IPO market as “particularly vibrant”. But a booming IPO market is not necessarily evidence of an equally strong investor conviction in equities. This divergence deserves scrutiny. The size of the IPO market is also not, by itself, a measure of capital formation. What matters is where the money goes and what happens after listing.

Capital Formation Or Private Equity Monetisation?

There is a fundamental distinction between a fresh issue and an Offer for Sale (OFS). In a fresh issue, capital flows directly to the company for factories, technology, expansion or debt reduction. In an OFS, existing shareholders sell their holdings and receive the proceeds.

The Rs 22,563 crore NSE IPO, for instance, was entirely an OFS. Proceeds accrued to selling shareholders rather than to NSE. While an OFS provides liquidity to early backers and recycles venture capital into the startup ecosystem, it is economically distinct from funding corporate growth. A recent analysis found that over 60 per cent of mainboard IPO funds raised over the preceding 18 months came through OFS. A record in primary fundraising, therefore, cannot automatically be equated with a record in corporate capital........

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