India’s US$200 mil-an-hour IPO boom shows rise of local investors.

By Jerry  Published On October 29, 2025

Six-and-a-half hours. That’s all it took for LG Electronics India Ltd’s US$1.3 billion (RM54.48 billion) initial public offering to be fully sold on Oct 7, marking the fastest take-up in 17 years among major Indian IPOs.

It’s offerings like LG’s, the nation’s third biggest for this year, that have made India one of the world’s hottest IPO venues, with total proceeds hurtling toward last year’s record tally of US$21 billion.

Yet the current listings wave isn’t just about volumes. It’s also about who’s buying these new stocks.

A rapidly expanding pool of money from domestic mutual funds, insurers and millions of retail investors is now dominating the IPO space, showing an increased ability to absorb large share sales. That’s reducing the reliance of India’s equity capital market on foreign funds, spurring a structural shift that some bankers and long-term observers say will help create a self-sustaining IPO market.

The euphoria comes with risks, though. Excessive valuations for some companies and over-subscription rates surpassing 100 times for many tiny IPOs have spurred concern about potential corrections that could harm mom-and-pop buyers.

In all, local investors have ploughed 979 billion rupees (RM46.5 billion) into IPOs since the start of 2024, versus 790 billion rupees invested by foreign funds, according to Prime Database, a capital markets data provider. Rising steadily over the years, the share of domestic investments in initial share sales stands at almost 75% for 2025 — the highest for any year in which proceeds exceeded 1 trillion rupees, the data show.

Home appliance maker LG’s IPO was sold at the rate of US$200 million an hour. Local investors — institutions and individuals combined — made up 60% of the total bids received during the three-day subscription period, excluding the anchor book. The stock surged 48% on debut.

Among all Indian IPOs that have raised at least 100 billion rupees, LG’s take-up was the fastest since Reliance Power Ltd. in January 2008 sold out its offering — the nation’s biggest back then — in less than a minute.

As a result, domestic institutional investors’ ownership in more than 2,000 companies listed on the National Stock Exchange of India Ltd has risen for five straight quarters to 19.2% as of June, the highest level in 25 years, according to data from the bourse. Holdings of foreign portfolio investors have dropped to 17.3%, the lowest in more than a decade.

New listings appear to be a more rewarding bet for investors as Indian IPOs have generated a weighted average return of 18% this year, beating the 9.7% advance in the NSE Nifty 50 Index. What’s notable is that the benchmark’s gain has come despite foreign outflows of about US$16 billion from the market, which are set to be the second biggest on record. That’s because domestic investors, mainly mutual funds and insurance firms, have piled in over US$70 billion.

Source: Theedgemalaysia


Leave A Reply

Your email address will not be published. Required fields are marked *

*