Jefferies’ Jacob said that IPO activity follows a similar path to the secondary market – when markets are strong, more companies go for IPO, and when volatility increases, listing activity slows down. He added that the current market is far deeper and more resilient than it was 10 years ago.

India’s IPO market is on a strong trajectory as more companies plan public offerings. In a conversation with ET, Jibi Jacob, managing director and head of equity capital markets at Jefferies India, pointed out that new IPOs will add between $1.3 – 1.5 trillion in market capitalisation over the next 7-10 years.

According to Jacob, “this would comprise about 15 per cent of the country’s projected $10 trillion market cap during the period,” reported ET.

According to the ET report, Jacob highlighted that the growing role of domestic investors is the key driver of resilience in the IPO market. He pointed out that domestic investors now contribute 55 – 60 per cent of anchor book allocations in the listings, compared to 40-45 per cent from foreign institutional investors (FIIs).

This has significantly reversed the trend seen 5- 7 years ago, when FIIs accounted for 60 per cent of the total investment in the IPOs.”This trend will likely continue, reducing reliance on foreign flows,” Jacob added.

Another positive factor contributing to the shift is  SEBI’s recent increase in the reservation for life insurers and pension funds in IPO anchor tranches from 33% to 40%.