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India Caps 2025 With 'Goldilocks' Economy as IPO Wave and Domestic Flows Reinforce Markets

Analysts expect further gains in 2026 with record local inflows offsetting foreign selling.

Overview

  • The government’s year-end review highlighted 8.2% real GDP growth in Q2 FY26, sharply lower CPI near 0.7% in November, and unemployment at multi-month lows around 4.7–4.8%.
  • Pantomath reported India led the world by IPO deal volume in 2025, with mainboard IPOs topping 100 and an estimated Rs 4 lakh crore primary market pipeline projected for 2026.
  • Dalal Street ended 2025 with the Sensex up about 8% and investor wealth higher by roughly Rs 30.2 lakh crore, as strong domestic institutional inflows countered record foreign portfolio outflows.
  • A Reuters-polled consensus cited by Firstpost forecasts Indian benchmarks to notch fresh highs by mid‑2026, with local money providing a structural backstop despite tariff and earnings risks.
  • Inc42 said startups raised about $11 billion across 936 deals in 2025, while mega rounds fell to 18 totaling $3.5 billion, and it reported Zepto has confidentially filed for an estimated $1.3 billion IPO targeted for around September 2026.