Mutual funds (MFs) have made a strong comeback in India’s primary market, investing close to ₹22,750 crore in initial public offerings (IPOs) so far in 2025. According to data from Prime Database, this accounts for nearly 19% of the total ₹1.22 lakh crore raised through IPOs this year.
Strong Inflows Fuel MF Participation
Mutual funds deployed around ₹15,158 crore through anchor investments and another ₹7,590 crore in the Qualified Institutional Buyer (QIB, non-anchor) segment between January and mid-October 2025.
Strong Systematic Investment Plan (SIP) inflows averaging over ₹20,000 crore per month have provided fund houses with ample liquidity to participate actively in large IPOs — even as foreign investor flows remained mixed.
Consistent retail inflows and robust fund performance have helped domestic MFs play a leading role in recent large public issues.
Top IPOs Dominate Mutual Fund Investments
The five largest IPOs of 2025 — Tata Capital (₹15,511.9 crore), HDB Financial Services (₹12,500 crore), LG Electronics India (₹11,604.7 crore), Hexaware Technologies (₹8,750 crore), and Ather Energy (₹2,980.8 crore) — together accounted for 42% of total IPO proceeds and absorbed nearly 44% of all mutual fund investments this year.
Among these, Hexaware Technologies attracted the highest MF investment of ₹3,548 crore, representing 40.5% of its total issue size, while Ather Energy received ₹1,379 crore. Meanwhile, Tata Capital, HDB Financial, and LG Electronics India each saw allocations ranging between ₹1,800 crore and ₹2,200 crore from fund houses.
Broader Sector Participation
Beyond these large-cap offerings, mutual funds also diversified across consumer, renewable energy, and industrial sectors.
Consumer and green energy firms like Ather Energy, Vikram Solar, and Saatvik Green Energy collectively attracted ₹2,400 crore of MF investment.
Industrial and materials companies, including JSW Cement, Belrise Industries, and Schloss Bangalore, contributed another ₹1,800 crore.
Other notable allocations included:
Anthem Biosciences – ₹738 crore
Schloss Bangalore – ₹839 crore
JSW Cement – ₹656 crore
In total, mutual funds invested over ₹8,000 crore across just eight major IPOs, reflecting their strong conviction in India’s corporate growth story.
Large Issues Continue to Attract Big Money
Analysts believe this surge in mutual fund participation reflects renewed confidence in the Indian equity market and the strong fundamentals of new-age companies entering the bourses.
The focus on large, well-established issuers suggests that fund managers are prioritizing scale, governance, and growth visibility over high-risk smaller offerings.
As the IPO pipeline remains strong for the rest of 2025, mutual funds are expected to continue their active role in supporting large equity fundraises — a trend that signals both liquidity strength and investor trust in the domestic market.
In summary
Mutual funds have turned out to be major players in India’s IPO boom of 2025, deploying close to ₹23,000 crore so far, primarily in big-ticket issues. With steady SIP inflows and investor confidence, this momentum is likely to be sustained in the coming months.
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