Capex to get more IPO cash, but firms keep powder dry

Behind the blockbuster exits by early investors and promoters this year, a quiet trend is emerging in initial public offerings:

- Abhinaba Saha

Nearly 20% of the money raised from fresh issuances in 2025 was earmarked for new projects, plant, and machinery, up significantly from just 8% last year, a Mint analysis shows.

The increase in expansion-related funding remains at odds with India Inc.'s broader hesitation towards major capacity additions. This also comes at a time when senior government functionaries have repeatedly urged the private sector to step up capital expenditure.

In recent years, investors have increasingly gravitated towards companies which prioritize capex visibility, balance sheet strength and operational cash flows, said Feroze Azeez, joint CEO of Anand Rathi Wealth. “This shift has forced many companies, especially mid-caps and new-age firms to present cleaner, more conservative utilisation plans at the time of listing,” Azeez said.

While rising capex allocations point to more efficient use of public money, they still pale against the sums pocketed by exiting investors. Of the ₹1.6 trillion raised by 96 companies so far, ₹98,356 crore or roughly 61% went to promoters and existing shareholders, the analysis showed. This is still below the peak of 71% in 2022, before a funding winter began, but the offer for sale (OFS) share has been steadily climbing for three years now.

According to Azeez, this is more reflective of a strong private-market exit cycle than of promoter ill-intent or business-model fatigue. Given the strong pipeline of late-stage startups and tech firms, where angels, early investors and growth private equity funds typically exit through IPOs, Azeez expects OFS to dominate in 2026 as well.