India's IPO Rush & Market Sentiment

By Vijay Venkatesh B

In October 2025, India's capital markets are witnessing an unparalleled upsurge in IPOs, establishing the nation as a global leader in equity fundraising. This phenomenon reflects fundamental changes in investor behavior, regulatory frameworks, and the maturation of India's financial ecosystem, and it goes beyond simply market enthusiasm. As domestic and foreign capital converges on Indian equity markets, understanding the dynamics driving this IPO boom becomes essential for investors navigating these unstable yet promising areas.

October 2025: A Record-Breaking Month for Indian IPOs

October 2025 is a turning point for India's main markets, as initial public offerings are expected to reach over $5 billion in a single month. This will be one of the most active periods ever for equity listings in the country. By the end of the third quarter, India had already raised $11.2 billion through IPOs, so this surge is on top of an already great year.

There were two big billion-dollar offerings that got a lot of attention from investors during the month. Tata Capital Limited, the Tata Group's financial services branch, offered ₹15,511.87 crore ($1.85 billion) between October 6 and 8. This included both new issues and sales.

This was the biggest IPO ever for the Tata Group and the biggest listing ever for a non-banking financial company in India.

LG Electronics India opened its ₹11,607 crore ($1.38 billion) offer for sale on October 7–9, giving investors a chance to get in on India's growing consumer electronics market. The company's shares started off very strong on October 14, rising more than 45% from the issue price. This gave the subsidiary a market capitalization of ₹1.14 trillion, which was more than its South Korean parent company's valuation of ₹9.68 billion. There are still a lot of IPOs coming up, worth more than ₹70,000 crore, in addition to these big ones. Some of the most well-known names are Boat, Meesho, PhonePe, Lenskart, Shadowfax, and Physics Wallah. This sustained momentum shows how deep and wide India's entrepreneurial ecosystem is when it comes to getting access to public markets.

Global Context: India's Growing Importance in IPO Markets

India's IPO performance should be looked at in the context of the whole world, where the country has steadily risen to the top in many areas. India had the most deals in the world in the third quarter of 2025, with 146 offerings that brought in $7.2 billion, according to EY's Global IPO Trends Report. This brought the total for the nine months to 254 deals worth $11.8 billion, with an average return on IPOs of 17.5%. In terms of funds raised in FY25, the National Stock Exchange of India surpassed NASDAQ to take the top spot globally. This impressive accomplishment highlights India's rising stature as a center for capital formation. While China led in IPO returns and the United States dominated in absolute capital raised during Q3 2025, India's steady volume shows a remarkable depth in its domestic capital markets, which is a stark contrast to other major markets.

The National Stock Exchange of India ranked fourth on the global IPO league table with fundraising at $5.51 billion, according to Market Intelligence data. It came after the Nasdaq Global Market, NYSE and the Nasdaq Global Select Market, comprising 8.9% of the worldwide aggregate IPO fundraising in the first half of 2025. As of July 11, US$1 was equivalent to 85.80 Indian rupees.

Decoding Market Sentiment: Fear, Greed, and the Indicators That Matter

Navigating India's ongoing IPO boom requires an understanding of market sentiment. Sentiment indicators show the psychological factors—fear, confidence, risk appetite, and herd mentality—that influence capital flows, whereas price trends provide obvious hints. In October 2025, a combination of sentiment metrics pointed to measured optimism, supported by low volatility but tempered by awareness of potential global shocks.

India VIX: A Window into Market Fear and Stability

As of October 17, 2025, the India VIX closed at roughly 11.63, falling between range 9.39 and 23.19 over a 52-week period. This level, which is significantly below historically typical "stress zones," denoted a period of market stability and managed risk perception. Under typical conditions, a VIX below 15 indicates low expected volatility and calmer market sentiment. This environment generally boosts investor confidence, making it easier for companies to raise capital through primary markets. The subdued VIX backdrop in October 2025 helped support the strong subscription and listing interest seen in major IPOs such as Tata Capital and LG Electronics India.

Why Low Volatility Supports IPO Demand

When markets are calm, institutional and retail investors are more comfortable deploying funds into new issuances. A low VIX environment tends to:

• Reduce risk premiums demanded by investors

• Encourage long-term positioning rather than defensive trading

• ·Improve subscription for large-ticket IPOs

This is why sentiment and volatility indicators are just as critical as fundamentals when timing an IPO.

VIX Range	Market Condition	Investor Sentiment	IPO Environment
Below 12	Very Low Volatility	Strong Confidence	Highly Favorable
12 – 15	Low Volatility	Stable / Optimistic	Favorable
15 – 20	Moderate Volatility	Cautious Neutral	Mixed
20 – 30	High Volatility	Fear / Uncertainty	Challenging
Above 30	Extreme Volatility	Panic	Very Unfavorable

Market Mood Index: Gauging the Emotional Temperature

The Market Mood Index, a composite measure incorporating multiple sentiment factors, provides a holistic view of investor psychology. This proprietary indicator, calculated by various financial platforms, aggregates data from five components:

• FII Net Open Interest in Index Futures – Tracking foreign institutional positioning

• Volatility and Skew – Measuring India VIX and options pricing asymmetry

• Price Momentum – Analyzing 30-day and 90-day exponential moving averages

• 52-Week High/Low Distribution – Gauging price strength across market breadth

• Gold vs Nifty Returns – Identifying safe-haven flows

  
  

Market Mood Index: Measuring the Emotional Climate

Several Market Mood Index platforms reported readings in the "Extreme Greed" to "Greed" range in mid-October 2025, indicating that investor optimism had risen to high levels. These readings weren't necessarily negative, but they did call for caution because, historically, long stretches of extreme greed have preceded corrections when valuations have surpassed fundamentals.

 When the Market Fails to Meet Expectations:

The Crash Scenarios India's stock market has experienced several devastating crashes in 2025 itself, demonstrating the fragility beneath the IPO boom. These corrections serve as warnings about the consequences of high expectations colliding with reality.

The 2024-2025 Rolling Crisis

The 2024–25 crash has wiped out over $1 trillion in wealth, with Sensex down nearly 12% and Nifty 13%. Instead of one big plunge, a slow, painful slide has eaten into portfolios fooling many into hoping for a rebound that never came.

Conclusion: A New Era for Indian Capital Markets

October 2025 represents more than just a busy month for IPO activity it symbolizes India's maturation as a capital formation powerhouse. The convergence of regulatory, domestic capital, corporate growth has created an ecosystem capable of absorbing large, complex offerings while maintaining reasonable price discovery.

In the long run, Indian stocks will gain from the structural resilience brought about by the transition from FII-dependent markets to DII-focused capital pools. Nevertheless, risk and volatility are not eliminated by this shift. Investors need to strike a balance between their passion for India's growth story and the principles of diversification and valuation discipline.

Primary markets will be crucial in directing savings toward profitable growth as India's $5 trillion market grows. IPOs not only raise capital but also enhance brand visibility, governance, and strategic flexibility.

Investors can participate in India's economic transformation through disciplined participation. In the Oct 2025 IPO surge, India showed it can match global markets, powered by retail participation, strong domestic capital, and national growth priorities.