{"id":2612,"date":"2026-10-12T08:32:37","date_gmt":"2026-10-12T08:32:37","guid":{"rendered":"https:\/\/newsraise.com\/in\/2026\/10\/12\/india-ipo-market-thrives-foreign-outflows\/"},"modified":"2026-10-12T08:32:37","modified_gmt":"2026-10-12T08:32:37","slug":"india-ipo-market-thrives-foreign-outflows","status":"publish","type":"post","link":"https:\/\/newsraise.com\/in\/2026\/10\/12\/india-ipo-market-thrives-foreign-outflows\/","title":{"rendered":"India\u2019s IPO market thrives as foreign investors pull out of equities"},"content":{"rendered":"\n<!-- Quick Adsense WordPress Plugin: http:\/\/quickadsense.com\/ -->\n<div class=\"9fece8afa224fd09e54b043d0febfb58\" data-index=\"1\" style=\"float: none; margin:10px 0 10px 0; text-align:center;\">\n<script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\r\n<!-- NR ATF -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-8898941184964366\"\r\n     data-ad-slot=\"4839033563\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script>\n<\/div>\n<p>The Indian equity market continues to grapple with a prolonged sell\u2011off, yet a contrasting surge in initial public offering (IPO) subscriptions is reshaping the investment landscape. The Sensex, which has not recorded a fresh closing high in more than two years, is down almost 16% from its lifetime intraday peak. At the same time, foreign portfolio investors (FPIs) and domestic retail participants are allocating sizable sums to IPOs, signaling a shift from secondary\u2011market equities to primary\u2011market issuances.<\/p>\n<h2>Record outflows from listed equities and inflows into IPOs<\/h2>\n<p>Data for September reveal that FPIs poured $1\u202fbillion (approximately\u202fRs\u202f9,676\u202fcrore) into IPOs while selling $4.8\u202fbillion (Rs\u202f45,537\u202fcrore) of existing listed shares. The $4.8\u202fbillion outflow marks the largest monthly withdrawal since April\u202f2026, when FPIs exited $6.7\u202fbillion (Rs\u202f63,167\u202fcrore) of equities. Extending the view to the first nine months of 2026, foreign investors have injected $5.9\u202fbillion into the primary market but have withdrawn $33.7\u202fbillion from listed stocks.<\/p>\n<p>Over the calendar year 2026, FPIs have sold a cumulative Rs\u202f2,95,971\u202fcrore through Indian exchanges while directing Rs\u202f54,398\u202fcrore toward IPOs. This net reallocation underscores a broader trend of moving capital from high\u2011valuation, mature companies to newer, potentially higher\u2011growth ventures.<\/p>\n<p>Retail investors exhibit a similar pattern. After purchasing Rs\u202f42,774\u202fcrore of listed shares in the June quarter, they sold Rs\u202f5,674\u202fcrore in July and August, yet invested more than Rs\u202f12,618\u202fcrore in IPOs\u2014a sharp rise from Rs\u202f1,307\u202fcrore in the preceding quarter. In the first five months of fiscal year\u202f2027, retail participants allocated nearly Rs\u202f37,070\u202fcrore to listed equities and Rs\u202f13,925\u202fcrore to IPOs, totaling Rs\u202f50,995\u202fcrore across both markets.<\/p>\n<h2>Why investors are favoring IPOs<\/h2>\n<p>Analysts attribute the shift to a combination of valuation dynamics and currency considerations. Sneha Poddar, Vice\u2011President of Research at Motilal Oswal Financial Services, notes that \u201cbenchmark indices and major listed companies have reached elevated valuation multiples following a sustained multi\u2011year rally,\u201d prompting institutional investors to trim exposure and take profits. IPOs, she adds, offer \u201caccess to growth\u2011oriented businesses, sometimes at discounts to listed peers, without the same price impact associated with large secondary\u2011market transactions.\u201d<\/p>\n<p>Ratiraj Tibrewal, CEO of Choice Capital Advisors, echoes this view, explaining that \u201clarge\u2011caps are fully valued and easy to sell when global yields rise,\u201d whereas IPOs provide a fixed price\u2014often at a discount\u2014and a sizeable allocation. Thomas V\u202fAbraham of Mirae Asset Sharekhan highlights the role of the rupee\u2019s depreciation against the US dollar, stating that foreign investors find it \u201clucrative to exit stocks and put a part of the money into IPOs\u201d given the currency headwinds.<\/p>\n<p>Beyond pricing, the primary market is attracting institutional capital seeking strategic exposure to emerging sub\u2011sectors. Poddar points out that \u201cinstitutional funds use IPOs to acquire early\u2011stage allocations in specialized electronics manufacturing, renewable energy supply chains, and digital infrastructure,\u201d areas that are under\u2011represented in traditional benchmarks.<\/p>\n<p>Retail participation, however, remains driven largely by short\u2011term momentum and listing\u2011gain expectations. Vinod Nair of Geojit Investments observes that \u201caverage listing gains of nearly 18% in H1FY27 versus around 7% in FY26 have further strengthened retail participation,\u201d with many investors chasing immediate price appreciation while institutional and anchor investors focus on underlying business fundamentals.<\/p>\n<h2>Long\u2011term market outlook amid volatility<\/h2>\n<p>Despite the ongoing equity sell\u2011off, market experts maintain a constructive long\u2011term view anchored in robust domestic fundamentals. Poddar emphasizes that \u201cIndia\u2019s domestic macroeconomic backdrop remains relatively resilient, with healthy GDP growth, strong credit growth, GST collections, auto and cement volumes, and robust domestic liquidity.\u201d She also notes an improving earnings outlook across financials, telecom, metals, and oil &#038;\u202fgas.<\/p>\n<p>Nevertheless, near\u2011term volatility is expected to persist, driven by external factors such as US Treasury yields, crude\u2011oil prices, and continued foreign outflows. Tibrewal adds that \u201cdomestic investors now own more of the market than foreign investors. Valuations aren\u2019t cheap, so returns should track earnings growth. Quality large caps should hold up better than expensive small and mid caps.\u201d<\/p>\n<p>Valuation metrics support this perspective. The Nifty\u202f50 is trading at roughly 17 times its 12\u2011month forward earnings\u2014well below its ten\u2011year historical average\u2014providing a \u201ccomfort zone for long\u2011term stock picking,\u201d according to Narendra Solanki of Anand Rathi Share and Stock Brokers. Mid\u2011 and small\u2011cap indices have experienced deeper corrections over the last quarter, while the Nifty\u202f50 has shown relative resilience.<\/p>\n<p>Thomas V\u202fAbraham observes that current valuations are approaching levels seen during the COVID\u201119 market lows, suggesting \u201ca good opportunity to park funds in long\u2011term growth stocks.\u201d He advises investors to treat such allocations as capital that can remain invested for an extended horizon, rather than short\u2011term liquidity.<\/p>\n<p>On the macro front, the Reserve Bank of India projects a 7.1% GDP expansion for FY27, supported by investment and consumption, even as inflationary pressures have prompted a repo rate increase to 5.5%. Analysts caution that elevated energy prices, higher global bond yields, geopolitical uncertainty, and persistent FII outflows could continue to weigh on sentiment, but the \u201ccorrection over the past two years has resulted in a meaningful valuation reset,\u201d reducing excesses observed in 2024.<\/p>\n<p>In summary, while the secondary market endures a pronounced downturn, the primary market\u2019s inflows highlight a strategic reallocation of capital toward IPOs that promise growth, pricing discounts, and reduced currency exposure. The divergence underscores a nuanced investor sentiment: short\u2011term caution in listed equities coupled with optimism for new, high\u2011potential issuances.<\/p>\n\n<div style=\"font-size: 0px; height: 0px; line-height: 0px; margin: 0; padding: 0; clear: both;\"><\/div>","protected":false},"excerpt":{"rendered":"<p>While the Sensex slides nearly 16% from its peak, foreign and retail investors are channeling billions into Indian IPOs, creating a stark divergence between primary and secondary markets.<\/p>\n","protected":false},"author":4,"featured_media":2613,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[299],"tags":[2871,2466,216,2870,2872],"class_list":["post-2612","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-equity-market","tag-foreign-portfolio-investors","tag-india","tag-ipos","tag-retail-investment","entry"],"_links":{"self":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts\/2612","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/comments?post=2612"}],"version-history":[{"count":0,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/posts\/2612\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/media\/2613"}],"wp:attachment":[{"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/media?parent=2612"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/categories?post=2612"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsraise.com\/in\/wp-json\/wp\/v2\/tags?post=2612"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}