India's market for initial public offerings (IPOs) has gained remarkable strength in 2025, positioning itself as a crucial exit channel for private equity investors. This key finding comes from the KPMG Pulse of Private Equity Q3'25 report, which highlights a significant shift in how global investment firms are realizing value from their Indian portfolio companies.
Robust Stock Markets Fuel IPO Surge
The report underscores that Indian stock exchanges have delivered exceptional performance in 2025. This bullish trend has created an ideal backdrop for companies to launch public offerings. Firms operating in high-demand sectors have been able to secure impressive valuations on their listing day, frequently achieving exit-day multiples that surpass those available in other global markets.
"This has led more PE firms to target India-based IPO exits for their portfolio companies -- particularly companies based in India or with strong roots in India," the KPMG analysis noted. The attractiveness of the Indian IPO route is a direct consequence of this favourable valuation environment.
Domestic Investors and PE Softness Shape the Trend
A major pillar supporting this trend is the robust base of domestic institutional investors within India. These investors have demonstrated a strong and consistent appetite for quality assets brought to market by private equity backers, providing reliable demand for new issuances.
Interestingly, this improving IPO climate arrives alongside a period of short-term softness in private equity investments into India during 2025. KPMG attributes this temporary dip to geopolitical and trade-related uncertainties affecting global capital flows. Despite these headwinds, the long-term view on India remains overwhelmingly positive.
India's Enduring Appeal and the Exit Revival
The country continues to be regarded as a highly attractive destination for private capital. This confidence is rooted in strong macroeconomic fundamentals, a vast working-age population, and steadily growing domestic consumption. The revival of IPO activity is especially significant for the global private equity ecosystem, where exit volumes have been muted in recent years.
In contrast, India's vibrant equity markets are actively helping to unlock value for PE investors, offering a viable and lucrative exit pathway. Looking forward, KPMG anticipates the current slowdown in PE investments to be temporary. Interest in Indian assets is projected to climb over the coming few years.
A sustained improvement in IPO activity is expected to play a critical role in driving future private equity dealmaking and exits across the country, reinforcing a healthy investment cycle.
