India’s primary market activity hit a 30-year high in September 2026, raising ₹38,785 crore across 30 IPOs. This surge stands out against a volatile secondary market where foreign investors have been net sellers. The divergence is driven by consistent mutual fund inflows and foreign institutions using the anchor investor route to bypass secondary market price swings.
September 2026 has become the busiest month for the Indian IPO market since 1996, with companies raising ₹38,785 crore across 30 mainboard offerings. This intense activity comes as a surprise to many, given that the secondary stock market has been battling volatility, high bond yields, and persistent selling by foreign portfolio investors (FPIs). This clear split between the primary market, where new shares are sold, and the secondary market, where existing shares are traded, highlights a unique trend in how capital is moving in the Indian economy.
Why FPIs Are Focusing on IPOs
The reason foreign investors are active in the primary market while selling in the secondary market lies in the anchor investor mechanism. In an IPO, institutional investors can secure a fixed allocation of shares before the stock lists. This allows them to bypass the daily price swings seen in the secondary market. Data shows that while FPIs have sold over ₹2.5 lakh crore worth of stocks in the secondary market throughout the year, they have directed roughly ₹48,550 crore into primary offerings. This strategy gives them access to growth-oriented companies while minimizing exposure to immediate market fluctuations.
The Role of Domestic Liquidity
The engine behind this primary market activity is domestic liquidity, particularly from mutual funds. Retail investors continue to pour money into markets through systematic investment plans (SIPs), ensuring that mutual funds have a constant supply of cash to deploy. Because these funds often participate in anchor books, they provide a reliable safety net for new listings. This consistent demand from mutual funds, combined with the eagerness of merchant bankers to launch issues before the need for updated audit filings arises, has compressed a high volume of IPOs into a single month.
Promoter Exits and Investor Caution
While the IPO market remains active, investors should note the source of the shares being sold. A significant portion of the capital raised—over ₹66,630 crore out of the ₹1.12 lakh crore total raised in 2026—has come through Offer for Sale (OFS) structures. In an OFS, existing promoters or private equity investors sell their stakes to the public. This means the money raised often goes to these early investors rather than into the company for new factories, equipment, or business expansion.
As the market continues to see this high volume of activity, the key factor for investors to track will be the valuation of these upcoming IPOs. While the current liquidity environment supports subscriptions, long-term success for any new listing depends on the underlying business performance and whether the price paid at the IPO leaves room for future growth, rather than just market sentiment.