Mainboard IPO fundraising climbed to ₹1.76 lakh crore in 2025, but average listing gains fell to around 9% from 29%, with SME IPOs showing a similar trend—₹11,400 crore raised and gains easing to 12% from 60%.
During the year, FIIs were net sellers with cash-market outflows of about ₹3.06 lakh crore, while strong DII inflows of roughly ₹7.88 lakh crore helped support the market.
The Nifty 50 rose about 10.5%, while smallcap and microcap indices declined nearly 6% and 10%, respectively.
India enters 2026 with 7.4 percent growth forecast and a 125 bps rate cut during 2025.
Capex led themes such as defence, Electronics, cloud computing, semiconductor, shipbuilding and data centres dominate the 2026 outlook.
After a record fundraising year in 2025, India’s capital markets enter 2026 amid tighter investor scrutiny, according to Steptrade.
The most striking data point from 2025 was the sheer scale of equity fundraising. Mainboard companies raised Rs 1.76 lakh crore through IPOs, up from Rs 1.60 lakh crore in 2024, while the number of mainboard listings rose to 104 from 91. SME fundraising jumped nearly 30 percent year on year to about Rs 11,400 crore, underlining India’s position as one of the most active primary markets globally.
However, Steptrade said the real story was not volume but pricing discipline. Average listing day gains for mainboard IPOs fell sharply to around 9 percent in 2025 from nearly 29 percent in the previous year. SME IPO listing day gains collapsed to about 12 percent from around 60 percent in 2024. Nearly half of all IPOs listed in 2025 were trading below their issue price by the end of the year.
“This is a clear inflection point, Capital is available, but it is no longer indiscriminate. 2026 will not be about chasing listing pops. It will be about execution, earnings visibility and governance. The market has moved from enthusiasm to evaluation, which is a constructive reset,” said Ankush Jain, Director & Fund Manager, Steptrade Capital.
Secondary markets reflected a similar divergence in 2025. Large caps and mid caps delivered positive returns, with the Nifty 50 rising 10.5 percent and the Nifty Midcap 100 gaining 5.8 percent. In contrast, the Nifty Smallcap 100 fell 5.6 percent and the Nifty Microcap 250 declined nearly 10 percent.
Foreign institutional investors remained net sellers, pulling out around Rs 3.06 lakh crore from the cash market during the year. Domestic institutional investors offset much of the selling, deploying about Rs 7.88 lakh crore. StepTrade said this resulted in narrow market breadth, with domestic flows concentrating in large, liquid names while smaller stocks corrected sharply.
Macro conditions strengthened through the year and are expected to support markets in 2026. India’s GDP growth for FY26 is projected at 7.4 percent. Inflation moderated sharply, with headline CPI briefly falling to 0.25 percent in October 2025. The Reserve Bank of India cut the repo rate by a cumulative 125 basis points to 5.25 percent during 2025 and shifted to an accommodative stance.
At the same time, external pressures remain a risk. The rupee weakened about 5 percent in 2025 and could face further depreciation amid capital flow volatility. StepTrade flagged unresolved trade frictions, elevated valuations in select pockets and sustained foreign outflows as key swing factors for sentiment in 2026.
PSU Banks, metals, autos and financial services outperformed during 2025, supported by government capex and improving balance sheets. IT services, real estate, FMCG and pharma lagged due to global demand concerns and valuation pressures.
On sectors, Steptrade said 2025 confirmed the dominance of infrastructure led themes. Looking ahead, Steptrade expects 2026 to be shaped by a deeper capex and manufacturing cycle rather than broad market rallies. Energy transition remains central, with India’s non-fossil power capacity crossing 262 GW and battery energy storage emerging as a critical new investment theme. Defence manufacturing is entering a multi year upcycle, with defence production at Rs 1.54 lakh crore in FY25 and a target of Rs 3 lakh crore by FY29.
Electronics manufacturing, semiconductors, Healthcare and data centres are also expected to attract sustained capital as policy incentives and private investment converge. Data centre capacity is projected to more than triple to over 5 GW by 2030, while semiconductor projects are expected to move from announcement to execution beginning in 2026.
Steptrade said the market environment in 2026 will reward patience over momentum. With liquidity becoming more selective and valuations under scrutiny, investors are likely to focus on companies aligned with long term policy priorities, visible cash flows and execution credibility rather than short term growth narratives.
