IPO Fundraising Activity Analyzed
A recent study by Bank of Baroda’s economic wing examined over 200 filings with India’s Securities and Exchange Board of India (Sebi) between April and October 2025. The goal was to understand how companies are using money raised through new stock offerings. The study focused on 189 companies where the reason for raising funds was clear.
Key Points
- Companies mainly use IPO funds to pay off debt.
- Capital expenditure (investments) make up a smaller portion.
- Over ₹1.2 trillion has been raised through new equity issues.
- Offer for Sale (OFS) component is an additional ₹62,000 crore.
- Investor appetite for new tech IPOs is expected to stay strong.
- Fundraising through the primary market could reach $20 billion in 2026.
The study looked at the documents companies filed with the Registrar of Companies (ROC) to see why they needed money. Some companies didn’t say exactly how they’d use the funds when they first filed, and these were excluded from the analysis. This meant the data was based only on companies that provided clear information.
The biggest use of the money raised so far is to pay back debts, accounting for 29% or ₹34,441 crore. Companies are reducing their borrowing to become more stable. Madan Sabnavis, the chief economist at Bank of Baroda, explained this is part of a strategy to reduce debt.
Another 25% of the funds are going into investments, which is important for the country’s overall growth. The remaining money is being used for things like keeping enough money on hand for day-to-day operations, building a strong brand, and paying for office space.
Bhavesh Shah, a managing director at Equirus Capital, believes that investors will still be interested in new companies in the technology and digital industries. He predicts that companies will raise a lot more money through IPOs in 2026, totaling about $20 billion.
Large IPOs are setting new standards, and more companies from smaller cities are also going public, which will help keep the market busy. This means more money will be available for businesses to grow and expand.
“The strength of the primary market lies in its ability to provide access to capital for ambitious businesses across India.”
