PE and portfolio firms’ IPO frenzy | Explained

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The private equity (PE) world has turned into a family feast where PEs and their offspring are in a race to grab a slice of the initial public offerings (IPO), whose character has undergone changes.

But if one questions the ethical side of PEs exiting through IPOs, while their portfolio firms also tap the same market, an answer to it cannot be a simple yes-or-no. PE funds look for maximum valuation, portfolio companies want long-term investor confidence, and public shareholders seek future growth. The interests, aligned initially, can diverge at the point of pricing and timing.

The PE’s journey mirrors the transformation of the Indian economy — from a protected, bank-dominated economy to a globally integrated, institutionally capital-run market where valuation, transparency and investor confidence become measurable variables.

PE investors in India faced a major challenge of exiting at the right opportunity because buying into promising potential companies was easier than offloading them at attractive valuations.

Nevertheless, the deepening of India’s capital markets has changed this equation, with IPOs becoming an increasingly important exit route for PE funds.

A recent survey by McKinsey and the Indian Venture and Alternate Capital Association said India is emerging as the top pick in Asia‑Pacific private markets, offering global investors scale and resilience as activity in ​the region slows.

Historically, PE investors depended heavily on strategic sales, but a stronger IPO market now provides a transparent exit route, helping recycle capital into new investments.

In FY2025-26, the country saw as many as 108 main-board IPOs raising ₹1.76 lakh crore, with the share of PE-backed listings at 35% of total issuances against 28% a year earlier.

In 2026-27, India has so far seen a high volume of mainboard and SMEs or small and medium enterprises public issues of size below ₹1,000 crore. Big-ticket companies like Reliance Jio, the National Stock Exchange (NSE), and Flipkart are set to join the bandwagon.

Signalling institutional acceptance of the PE industry itself, the listing of Gaja Alternative Asset Management as a pure-play PE platform represents a milestone in this direction.

The listing of Gaja Capital is not only symbolic because it converts PE from an invisible force influencing India Inc. into a publicly accountable financial institution, but it is also fast turning into a tool for restructuring businesses, improving governance and connecting Indian enterprises with global capital markets.

KKR-backed Radiant Life Care’s combination with Max Healthcare was designed around consolidating healthcare assets into a larger platform, unlocking revenue and cost synergies, and ultimately creating a listed healthcare entity. The current healthcare market is going through consolidation dynamics, with large PE-backed platforms seeking to acquire regional hospital chains.