BusinessLine·2025-12-24 13:43Core Insights - The funds raised through IPOs in 2025 have increased by 7% to ₹1.71 lakh crore from ₹1.59 lakh crore in 2024, driven by strong retail and domestic institutional participation [1] - The offer-for-sale (OFS) component has risen by 13% to ₹1.07 lakh crore, accounting for 63% of the total funds raised, while fresh capital raised for capital expenditure has remained nearly unchanged at ₹64,031 crore [2] - The dominance of OFS in IPOs suggests that market valuations may be nearing a cyclical peak, as informed insiders typically divest when prices are favorable [4] Fundraising Dynamics - The largest IPO this year was Tata Capital, raising ₹15,512 crore entirely through OFS by Tata Motors, while HDB Financial Services raised ₹12,500 crore through OFS by HDFC Bank [3] - Other significant OFS issues include LG Electronics (₹11,607 crore), KSH International (₹290 crore), and Swiggy (₹6,828 crore) [3] Market Trends - The relatively low share of fresh issue proceeds dilutes the original purpose of IPOs, which is to fund expansion and strengthen balance sheets [5] - Future IPOs are expected to continue being OFS-heavy, with fundraising estimates for next year ranging between ₹1.8 lakh crore and ₹2.5 lakh crore [8] Investor Considerations - Retail investors are advised to focus on the use of proceeds and promoter involvement post-IPO, rather than just short-term listing gains [6] - Extra due diligence is necessary when OFS dominates an IPO to avoid funding exits at inflated prices [7]