India IPO market 2026: OFS share may dip to 48%

A slower start for mainboard IPOs in 2026

India’s mainboard IPO market has cooled in 2026 after two years of record fundraising. The slowdown has been linked to market volatility, with catalysts cited as US tariff-related moves and subsequent strikes in Iran. Against this backdrop, IPO timelines have stretched and several issuers have reportedly held back despite a strong pipeline.

At the same time, the structure of IPOs is back in focus. A large share of India’s IPO fundraising has historically come through offers for sale (OFS), where existing shareholders sell shares and the company does not receive fresh capital. Fresh issue proceeds, in contrast, typically fund business expansion, capex, or balance sheet repair.

IPO fundraising drops sharply in early 2026

Market data from Prime Database shows fundraising through IPOs in the first five months of 2026 at ₹56,322 crore. This is sharply lower than ₹82,678 crore in the same period last year, and below ₹72,841 crore in the first five months of 2024. The number is still far higher than the ₹12,281 crore raised in the comparable period in 2023, underscoring that activity has slowed from a high base rather than collapsing.

Volatility and valuation concerns have been key reasons for delays, alongside geopolitical tensions. Even with a pipeline, issuers and investors often prefer clearer market conditions to reduce the risk of weak subscriptions or disappointing listing performance.

OFS dominance remains the core structural debate

A Mint analysis of Prime Database data shows OFS accounted for 60% of IPO fundraising in 2024 and 63% in 2025. In 2020, OFS touched 87%. Since 2012, offers for sale have made up more than half of all IPO fundraising, pointing to a long-running preference for monetisation by selling shareholders.

Large deals have often leaned heavily on OFS. Of the 20 largest IPOs since inception, 15 had OFS components accounting for more than half the total issue size. Nine of the 20 were entirely OFS, including Hyundai Motor India Ltd’s ₹27,859 crore IPO and Life Insurance Corporation of India’s ₹20,557 crore issue.

Foreign-parent listings highlight the OFS trend

A Reuters report adds a cross-border dimension to the OFS discussion. It said that of six foreign-based companies that listed their Indian units in Mumbai since 2024, just one raised new funds, with the rest structured purely as secondary offerings. Prime Database data cited in the report showed foreign-based parents pocketed nearly $1 billion through such secondary-offering IPOs, with Hyundai Motor and LG Electronics accounting for more than 80% of those payouts.

The Reuters report framed the imbalance starkly: for each dollar raised across these IPOs taken together, more than $19 went out. It also said the planned $1 billion IPO of Walmart’s Indian payments arm and Modern Times Group’s $135 million IPO of its local gaming unit are planned via the OFS route.

A potential shift: OFS share could drop to a minority in 2026

Despite the long-run dominance of OFS, one data point stands out. If a proposed IPO proceeds as suggested in the provided context, the OFS share could fall to about 48% in 2026, which would be a rare minority.

Separately, the context also notes a proposed stake dilution of 2.93%, close to the 3% mark, and that part of the proceeds would be used to repay debt of ₹27,500 crore. Debt repayment, when funded via fresh proceeds, can change the balance between OFS and primary capital raised, and can be a key lens for investors assessing the purpose of an IPO.

The pipeline is large, but launches are on hold

The pipeline remains significant. The provided context says new IPO launches are currently on hold due to the West Asia conflict and heightened market volatility. It adds that 144 companies have received SEBI approval to raise around ₹175,000 crore, while another 63 companies are awaiting approval to raise about ₹137,000 crore.

This gap between approvals and actual launches is important for near-term fundraising numbers. Approvals signal intent and readiness, but market windows determine execution.

Secondary-market cues: Nifty slips below 24,000

Daily market moves have also reflected weaker risk appetite. The market closed largely in the red in the session cited, with Nifty ending below the 24,000 mark. Nifty IT was the top losing index, closing 4% lower.

But the week still ended higher, with the Sensex and Nifty posting a second straight week of gains despite the Friday fall. This mixed tape often pushes IPO investors to focus more on pricing discipline and post-listing downside protection.

SEBI allows open-market buybacks from August 1, 2026

In another capital-markets development, SEBI has announced the return of buybacks. Companies have been allowed to launch open-market buybacks from August 1, 2026, with a 66-day window provided for completion.

SEBI has also set guardrails. One cited requirement is that buybacks must be completed within 66 days from the date of opening. Another is that about 40% of the earmarked buyback funds should be utilised in the first half of the buyback period. These conditions can influence how buybacks are executed and how investors interpret buyback announcements.

Macro signals: monsoon deficit and tax collections

Broader macro signals in the provided context were mixed. India’s rainfall deficiency in June rose to 41%, with the southwest monsoon stalling over Maharashtra and Central India’s deficit rising to 67%. The context also notes that by the end of June, the monsoon was about 40% below normal.

On the fiscal side, direct tax collection from April to June rose 15% year-on-year to over ₹500,000 crore, driven by strong growth in both corporate and non-corporate receipts. Gross direct tax collections grew 12.5% to more than ₹600,000 crore.

Key numbers at a glance

Why the OFS mix matters for investors

High OFS-heavy issuance can reshape how investors evaluate IPOs. When the bulk of proceeds go to selling shareholders, investors often scrutinise valuations and business fundamentals more closely, because the listing may not directly strengthen the company’s balance sheet.

At the same time, the data suggests the market is not one-dimensional. The possibility of the OFS share dropping to around 48% in 2026, if the proposed transaction structure plays out, would be a meaningful change in the composition of fundraising. Add to that the reference to using proceeds for ₹27,500 crore of debt repayment, and investors may see more IPOs framed around balance sheet actions rather than pure shareholder exits.

Conclusion

India’s IPO market has slowed in 2026 as volatility and geopolitical risks tightened the listing window, even as a large pipeline waits for better conditions. OFS remains a dominant feature, but data points in the provided context suggest 2026 could see a rare shift toward more primary capital if proposed structures proceed. The next key dates to watch include August 1, 2026, when SEBI’s open-market buyback framework becomes effective, and any reopening of the IPO calendar once volatility eases.