More cash-out than capital raise: OFS gains ground in IPO market

In the first half of fiscal year 2027 (FY27), the initial public offering (IPO) market raised a record ₹94,205 crore, but a larger portion of the funds went to existing shareholders selling their stakes rather than funding new capital for companies. Seventy-five percent of the total amount raised, around ₹55,695 crore, was generated through offers for sale (OFS), while the remaining 25%, or ₹38,510 crore, came from fresh issues, according to PRIME Database data.

The shift towards OFS was primarily driven by the ₹22,563-crore IPO of the National Stock Exchange (NSE), which accounted for nearly 24% of H1 IPO fundraising. Excluding NSE, the H1 FY27 IPO market raised about ₹71,642 crore, only 3% higher than the ₹69,533 crore raised in H1 FY26. The increase in OFS-led fundraising was largely concentrated in the NSE issue, rather than a widespread shift towards shareholder exits across the IPO market.

Fresh capital, which increased by 6.4% year-on-year to ₹38,510 crore, was mainly directed towards company balance sheet strengthening, with 42% of the fresh issue proceeds going towards debt repayment. The primary market saw a 20% increase in the number of firms accessing the mainboard, with 78 IPO issues in H1 FY27 compared to 65 in the previous year.

However, the size of the average issue remained unchanged, and activity was concentrated in the latter part of the half, with ₹39,340 crore raised in September alone, accounting for over 40% of H1 fundraising. The surge in IPO activity was triggered by the one-time extension granted by SEBI to IPO approvals, which were set to expire in September.

Nearly 250 companies are expected to seek funding of about ₹4.65 lakh crore in the second half of FY27, as per PRIME Database.