The Indian primary market witnessed a fascinating divergence in 2025. While private equity and venture capital investors cashed out the highest amount from initial public offerings in four years, their footprint in terms of the number of companies they backed for listing shrank to its smallest in at least a decade.
Record Exits Amid Shrinking Influence
Data from intelligence firm Prime Database reveals a striking trend. In the calendar year 2025, PE and VC firms offloaded shares worth a massive ₹20,643 crore through the IPO route. This marks the highest value of such stake sales since the record year of 2021, when exits had touched ₹31,684 crore amidst a global liquidity surge and a flurry of tech listings post-pandemic.
However, this surge in exit value coincided with a stark decline in their proportional presence. These financial investors backed fewer than one in five IPOs that hit the markets in 2025. This 18.45% share is a sharp fall from around one in four listings in 2024 and nearly one in three in 2023. A decade ago, in 2015, PE/VC-backed companies dominated, accounting for nearly 62% of all IPOs.
Experts Decode the Dual Narrative
Market veterans interpret this data not as a retreat by PE/VC players but as a sign of a maturing and broadening economy. Deven R Choksey, founder of DRChoksey FinServ, argues that the low share is a sign of strength. "More traditional businesses, like those in manufacturing, hospitality, and consumer tech, are now mature enough to list without ever needing venture capital," he explained.
The year 2025 itself saw significant PE/VC-backed names like Groww, Lenskart, Urban Company, and Ather Energy make their public market debut. Major investors including SoftBank, Temasek, and Peak XV Partners found exit opportunities. For instance, Peak XV sold shares worth nearly ₹2,700 crore across IPOs of portfolio companies like Pine Labs, Meesho, and Groww's parent firm.
Pranav Haldea, MD of Prime Database Group, offered another perspective. He noted that the low share by number does not signify reduced activity. "This could also point towards them continuing to hold on to their investment and not exiting, either partially or fully, at the time of the IPO," he said. He added that if the primary market remains active in 2026, PE/VC stake sales are likely to gain further momentum.
A Record-Breaking Market for Young Firms
The broader IPO landscape in India is booming. In 2025, companies raised a historic ₹1.95 trillion through 365 IPOs, eclipsing the previous year's record. An analysis by Motilal Oswal showed that a significant portion of the capital raised in 2024-25 came from young companies less than 20 years old, highlighting the growing access to public markets for newer firms.
The pipeline for 2026 remains robust, with several PE-backed giants like Oyo, PhonePe, and Zepto preparing to list. This sets the stage for another potentially milestone year. Furthermore, as Vivek Soni, Partner at EY India, pointed out, a favourable US-India Free Trade Agreement could provide a fresh trigger for private dealmaking sentiment.
Thus, the story of 2025 is one of quality over quantity for PE/VC exits, set against the backdrop of an exceptionally vibrant and diverse Indian IPO market that is welcoming a new generation of companies to the fore.
