India’s primary market has started 2026 on a strong note, with initial public offerings (IPOs) raising $2.5 billion in the first quarter, marking a 7.8 per cent increase year-on-year (YoY) and the highest first-quarter performance since 2018, a new report said on Thursday.

India remained a key global IPO destination, accounting for around 8 per cent of worldwide proceeds during the quarter, according to a report by London Stock Exchange Group (LSEG).

The broader equity capital markets (ECM) showed resilience even as global uncertainties weighed on dealmaking sentiment.

Follow-on offerings contributed a major share, accounting for 58 per cent of total proceeds, the report stated.

Sector-wise, financial companies led the fundraising activity, contributing $1.2 billion and capturing over one-fifth of the market.

This was supported by large deals such as the IPO of Raajmarg Infra Investment Trust. Energy and power emerged as the second-largest sector, raising $1.0 billion with a sharp 127 per cent growth compared to last year.

Retail activity also surged, nearly tripling to $893.4 million and securing a 15.1 per cent share, the report stated.

However, overall dealmaking activity remained subdued. Mergers and acquisitions (M&A) involving India fell sharply, with total deal value dropping 44.5 per cent year-on-year to $17.4 billion.

In the debt market, bond issuances by Indian entities stood at $19.5 billion, down 39 per cent from a high base last year, making it the weakest first quarter in a decade.

Financial institutions continued to dominate bond fundraising, accounting for over 70 per cent of total issuance, the report stated.

Commenting on the trend, Elaine Tan, Senior Manager at LSEG Deals Intelligence, said dealmaking in India has begun the year cautiously, with a noticeable slowdown in both M&A volumes and large transactions.

“Deal makers continue to prioritise scale, AI adoption, domestic consolidation, and portfolio divestitures, amidst uncertainty and broader caution, resulting in more selective pockets of activity,” Tan stated.