India’s IPO Boom Set To Continue In 2025 Despite Regulatory Headwinds

India’s record-breaking spree of capital-raising through initial public offerings (IPOs) is expected to maintain momentum in 2025, fueled by a strong pipeline of companies gearing up to go public.

According to Sundararaman Ramamurthy, CEO of BSE (formerly Bombay Stock Exchange), over 90 companies have filed their draft prospectuses with the market regulator. These firms collectively aim to raise around ₹1 trillion ($11.65 billion) during the year.

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Last year, Indian exchanges witnessed a surge in IPO activity. A total of 91 large companies went public on BSE and NSE (National Stock Exchange), raising a record ₹1.6 trillion, as per data from Prime Database. Overall public equity fundraising more than doubled to ₹3.73 trillion.

Shift In IPO Composition

Ramamurthy highlighted a growing trend of Offers for Sale (OFS), where existing shareholders sell their shares rather than companies issuing fresh capital. He expressed hope that fresh capital-raising initiatives would see an uptick in the future.

Robust Revenues But Challenges Loom

BSE reported ₹1.57 billion in listing fees for the first half of 2024-25, up from ₹1.3 billion a year ago, according to East India Securities. While Ramamurthy refrained from commenting on BSE’s financials ahead of its quarterly earnings, he acknowledged the impact of new derivative trading rules.

The notional value of derivatives traded in India has dropped by 40% since September, with premiums falling by 15%-20%. Three of six new regulations by the market regulator will come into effect by April, which may further reduce volumes.

“We’ll assess the full impact after April,” Ramamurthy said.

Diversifying Revenue Streams

To offset risks, BSE is working to diversify its revenue base. The exchange is expanding its index business, having launched 15 indices since mid-2024. It also plans to explore growth in co-location services to cater to the rising demand for high-frequency and algorithmic trading.

“There is potential to generate revenue from co-location, but we’ll make a decision after April once market volumes stabilize,” he added.

Despite challenges, BSE’s shares have gained 10% since November 20, reflecting optimism about the exchange’s resilience amid regulatory changes.