The Mainboard Myth: Retail Demand Is Surging, But QIBs Remain The True Kingmakers

Investor participation in the primary market is surging to record highs. A significant rise has also been witnessed in the retail investor category’s participation in public issues as IPOs become a part of everyday conversations.

The rising usage of trading apps and listing day euphoria suggests that everyday investors make or break the demand for a company's shares. Thus, the narrative surrounding the primary market often depicts the retail investor as the driving force behind a successful public issue.

While it is true that the retail segment’s participation in an issue impacts the demand for an IPO-bound company’s shares, a look at the data disclosed by the Securities and Exchange Board of India’s (Sebi) statistical handbook for 2025-26 shows that retail participation is undeniably growing, but institutional giants still firmly control the landscape.

A Record Surge in Public Offerings

According to data released by the Sebi in its Handbook of Statistics for 2025-26, there has been a boom in mainboard initial public offerings. The BSE saw issuances leap from 79 in 2024-25 to 109 in 2025-26, mobilising Rs 1,77,102 crore. The NSE also saw aggressive growth, recording 108 issuances that raised Rs 1,73,009.63 crore.

Retail Participation on the Rise

As the number of IPOs grew, so did the share of retail individual investors participating in the primary market. On the NSE, the share of allocations going to retail investors grew from 19.48 per cent in the previous financial year to 23.47 per cent in 2025-26.

The BSE witnessed similar gains in retail allocations, inching up from 20.33 per cent to 21.37 per cent. This growth shows that retail investors are actively on the lookout for opportunities in the primary market.

Institutions Maintain Market Dominance

While retail participation has grown, as evidenced by the growth in allocation, the data dismantles the myth that retail money dictates the ultimate fate of an IPO. Qualified Institutional Buyers, or QIBs, continue to remain the undisputed kingmakers.

In spite of the retail surge, the institutional players absorbed 63.84 per cent of the total allocations on the BSE and 61.70 per cent on the NSE during the 2025-26 period. By securing well over 60 per cent of the available shares, institutional money provides the foundational capital that ensures an issue is fully subscribed and fundamentally secure.

Meanwhile, the middle ground occupied by Non-Institutional Investors, a category that includes High Net Worth Individuals, remained relatively flat. This segment secured roughly 13 per cent of the allocations across both exchanges in 2025-26, leaving the tug of war between the retail public and institutional funds.

Ultimately, the primary market is operating on a dual engine. The retail segment is supplying the discourse in the form of public sentiment and the buzz that dominates headlines. However, when it comes to the heavy lifting of capital mobilisation, the core stability of the IPO market still rests overwhelmingly in the hands of the institutional players.

The reason QIBs secure the bulk of IPO allocations is due to the regulatory framework designed by the Sebi. Under the standard listing route, Sebi mandates that a maximum of 50 per cent of the net offer must go to QIBs, while retail investors receive a minimum of 35 per cent, and Non-Institutional Investors get 15 per cent.

However, Sebi also has an alternate listing route for loss-making companies that do not meet strict three-year profitability criteria; the regulator mandates that a massive 75 per cent of the offer must go to QIBs, shrinking the retail quota to just 10 per cent.

As more high-growth, pre-profit startups become IPO-bound, the 75 per cent QIB mandate pulls the aggregate institutional allocation past the 60 per cent mark.

For retail investors, this structure reduces the probability of securing allotment when listing-day euphoria meets a restricted 10 per cent quota. However, this institutional allocation acts as a built-in due diligence mechanism, ensuring that businesses are scrutinised by professional capital before retail money invests.