August 27, 2025

Mumbai is buzzing with exciting news for the Indian stock market! Even though Foreign Portfolio Investors (FPIs) have been selling shares in the secondary market lately, they are going gaga over India’s IPOs. These overseas investors have pumped a whopping ₹26,508 crore into the anchor book of Indian companies' IPOs in the financial year 2025 (FY25). That’s three times more than last year! The FPIs’ share in total anchor investment jumped to 46% in FY25 from 35% in FY23. It seems they just can’t resist the lure of India's incredible growth story. Bhavesh Shah, managing director and investment banking boss at Equirus Capital, explained why FPIs love IPOs: "You are backing a company before the market fully prices its future prospects." Simply put, they invest early, hoping for big wins as the company grows. Anchor investors have to hold their shares for a certain period, so they bet big on companies at cheaper prices with hope for high returns. Domestic Institutional Investors (DIIs) are also partying hard! Mutual funds, insurance firms, and alternate investment funds raised their stakes too—investing ₹30,709 crore in IPO anchor books in FY25. That’s 2.5 times more than last year. Pranav Haldea, managing director of Prime Database Group, said, "The prominence of domestic institutions in the primary market is a positive development," especially for smaller IPOs. This reduces dependence on foreign money, which is good news for Indian businesses. But why this sudden love for IPOs by FPIs, when they are selling Indian shares aggressively elsewhere? Well, geopolitical tensions, trade tariff worries, and high valuations have made them cautious in the secondary market. Yet, IPOs offer fresh and unique business models at cheaper valuations with less chance of bulk buying affecting stock prices. Interestingly, while local funds dominate the anchor market with a 53% share in FY25, their slice has dropped from 65% in FY23. Among Indian investors, mutual funds poured in ₹21,740 crore, and insurance companies added ₹5,098 crore as anchor investors in FY25. So, while FPIs sold nearly ₹1.3 lakh crore of Indian shares in the secondary market during FY25 and ₹2,322 crore till mid-August this year, they’re still betting big on India’s IPOs. Seems like a roller-coaster ride, but one thing is clear: both foreign and domestic money see India’s IPOs as a golden ticket to big growth and juicy returns. Who says the Indian market is boring? The IPO party is just heating up!

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Tags: Foreign portfolio investors, Indian ipos, Anchor investors, Domestic institutional investors, Stock market, Fy25,