Equity Markets Analyzed: 2025 Trends
In 2025, the total amount of money raised through stock offerings (equity capital markets – ECM) went down, even though many companies were successfully listing their shares on the stock market. Kotak Investment Banking reported that ₹5.1 trillion was raised, which is less than the ₹6.1 trillion raised in 2024. This drop was mainly caused by fewer companies doing follow-on offerings and selling existing shares.
Key Points
- ECM fundraising decreased to ₹5.1 trillion in 2025.
- IPOs soared, marking a new high in activity.
- Follow-on offerings shrank by 53% to ₹89.76 billion.
- Sell-down activity reduced to ₹2.30 trillion in 2025.
- Domestic investors dominated IPO demand, leading price trends.
- Large-cap IPOs performed exceptionally well with high gains.
Understanding the Numbers
“Follow-on offerings” are when a company already listed wants to raise more money by selling more shares to the public. These include things like QIPs, FPOs, and rights issues. “Sell-downs” involve existing shareholders selling their shares on the market, using methods like block deals and offer-for-sale (OFS) programs.
IPO Performance
Despite the overall decline in ECM fundraising, Initial Public Offerings (IPOs) did very well. Domestic investors, like large mutual funds, were the biggest buyers of these new shares, showing they were 60% of the funding. New technology companies especially did well, gaining an average of 38% after listing their shares.
Key IPO Findings
Kotak Investment Banking found that companies holding IPOs worth more than ₹3,000 crore (about $400 million) typically saw their share prices go up by around 19% after listing. Smaller IPOs saw a lower average gain of 9%. Sectors like financial institutions, new technology, and industrial companies were especially active in IPOs.
Future Outlook
Kotak Investment Banking predicts that the total amount raised through ECM will increase to over ₹6 trillion in the coming years. This suggests a continued, though perhaps changing, level of activity in the stock market.
Ultimately, understanding these market trends is crucial for making smart investment decisions.
