How Are There So Many IPOs Despite Tariffs, H-1B Restrictions, and Global Headwinds?

Despite rising protectionism, tighter immigration policies, and global economic volatility, initial public offering (IPO) markets are experiencing a surge, particularly in India. In FY25, India saw 80 mainboard IPOs, raising ₹1,630 billion, a 163% jump from ₹619 billion in FY24. Globally, 1,159 IPOs raised $119.1 billion in 2024, down 10% YoY, yet the Americas and Europe, Middle East, India, and Africa (EMEIA) regions posted strong rebounds.

This paradox, where capital markets flourish even as trade barriers and visa restrictions intensify, reflects a deeper decoupling between policy headwinds and investor sentiment.

Tariffs and H-1B Restrictions: Assessing the Impact

The US has implemented significant policy changes affecting Indian businesses, notably the imposition of a 50% tariff on Indian exports and a substantial increase in H-1B visa fees to $100,000. These measures have raised concerns among Indian firms, particularly in sectors such as information technology (IT) services and manufacturing. However, the direct impact on IPO activity has been nuanced.

Following the tariff, many companies are facing increased operational costs and challenges in retaining and acquiring talent. However, there are also a few companies that have focused on diversifying their markets and investing in local talent pools.

For example, Accenture announced plans to create 12,000 jobs in Andhra Pradesh. The decision shows a strategic shift towards improving domestic operations. Such adaptations suggest that Indian companies are resilient and capable of overcoming policy-induced headwinds without hindering their IPO ambitions.

Key Drivers of India’s IPO Boom

Here are some key drivers of the IPO boom in India.

• Regulatory Acceleration

The Securities and Exchange Board of India (SEBI) has implemented several structural reforms that have directly accelerated IPO activity in FY26. Most notably, the confidential filing route introduced in late FY25 has enabled issuers to test investor appetite without public disclosure, reducing reputational risk and improving timing flexibility. As of September 2025, 17 companies have opted for this route, including large-cap tech and consumer firms.

• Surge in Domestic Liquidity

India’s household financial savings rate rose to 6.5% of Gross National Disposable Income (GNDI) in FY25, up from 5.1% in FY24, injecting substantial liquidity into equity markets. This surge coincides with the expansion of Unified Payments Interface (UPI)-linked IPO bidding, which now covers over 90% of retail applications, reducing transaction friction and expanding access. Retail participation has surged in terms of application volume, with an average of 15.68 lakh retail applications per IPO in 2025, up from 12.73 lakh in 2024, representing a 23% increase. This liquidity infusion has offset global headwinds and sustained domestic demand for equity issuance.

• Sponsor-Backed Exits

FY26 is witnessing a strategic wave of sponsor-backed exits, with private equity and venture capital firms capitalising on valuation highs to monetise holdings. In 2025, substantial amounts of IPOs were driven by sponsor exits, including marquee listings from PhonePe, Tata Capital, and Zepto. These exits are not merely opportunistic but structured to align with investor appetite for growth-stage profitability.

The confidential filing route has further enabled these sponsors to test the market waters discreetly. This monetisation cycle is expected to continue through FY26, with over ₹2 lakh crore in private equity (PE)-backed IPOs projected this year, reinforcing primary market depth.

• Fiscal Incentives

The Indian government’s Production Linked Incentive (PLI) schemes have catalysed IPO activity in manufacturing, electronics, and renewables. As of August 2025, ₹1.97 lakh crore has been committed under PLI across 14 sectors, with ₹21,534 crore already disbursed across 12 sectors as of June 2025. This has led to IPO filings from mid-sized manufacturers and tech firms seeking capital for expansion of their capacity.

• Consumption Growth

Despite global trade disruptions, India’s Gross Domestic Product (GDP) is projected to grow between 6.5 and 6.7% in FY26, up from 6.3–6.5% in FY25. This resilience is underpinned by domestic consumption, which contributes nearly 60% of GDP. Tax incentives announced in early 2025 are expected to add ₹6.7–7.9 trillion to economic activity, thereby cushioning the impact of reduced exports resulting from tariff hikes. The Ministry of Finance’s March 2025 review confirmed that leading indicators such as Goods and Services Tax (GST) collections, e-way bills, and retail credit growth remain robust. This macroeconomic stability has emboldened issuers to proceed with IPOs despite external volatility.

Policy vs. Market Sentiment: Who’s Winning?

Despite policy challenges, markets are showing confidence in long-term growth. The Bombay Stock Exchange (BSE) Sensex gained 5% in FY25, and India’s nominal GDP crossed $4 trillion mark in 2025. This makes investors optimistic about structural reforms, a young workforce, and the growing strength of digital infrastructure.

IPOs are also gaining attention as a means to mitigate risks associated with global uncertainty. Companies are tapping into diverse investor groups and funding sources that are less dependent on any single market.

At the same time, IPOs bring better transparency and stronger governance, which are particularly important during volatile periods. With SEBI pushing for environmental, social, and governance (ESG) reporting, independent boards, and stricter audits, Indian stock listings are becoming more trusted worldwide.

Conclusion

The growth in the number of listings, even after tariffs, visa restrictions, and global headwinds, suggests that, as of now, markets are relatively resilient to policy shocks. For investors, the lesson is clear: focus on domestic drivers, such as liquidity, consumption, and regulatory reforms, rather than external noise. IPOs offer diversification, transparency, and exposure to resilient sectors. A smart strategy would be to selectively participate in IPOs backed by strong fundamentals, while balancing portfolios with domestic growth stocks less vulnerable to geopolitical risks.

Also Read:

The ₹1.4 Lakh Crore Reversal: Are FIIs Ready to Reignite India’s Equity Rally?

Sources

KPMG
The Times of India
The Economic Times
IPO Expert
Press Information Bureau, Government of India
Economic Policy Division, Ministry of External Affairs, Government of India