Domestic Investors Fuel India's IPO Boom: The Quiet Power Behind Record Offerings

Domestic buyers sprinted to snap up LG Electronics India's $1.3 billion IPO in 6.5 hours—the fastest take-up in 17 years ^[1]. That surge isn’t a one-off. A rapidly expanding pool of money from domestic mutual funds, insurers and millions of retail investors is now dominating IPOs, reducing India’s reliance on foreign funds and fueling a self-sustaining wave ^[1]. Yet the party isn’t risk-free: valuations for some names look stretched, and over‑subscription rates for smaller IPOs have raised red flags ^[1].

Lenskart is a focal test case for this money mix. Retail quota sits at 10%, even as big fund managers step in to anchor pricing. Reports note SBI Mutual Fund has already bought about ₹100 crore of Lenskart ahead of listing ^[3], underscoring how anchor funds can keep prices buoyant for a post-listing glide ^[3]. Founders like Peyush Bansal have even acted to support the stock ahead of listing, per market chatter ^[2].

• Anchor/retail dynamics – Retail quotas and anchor buying are shaping pricing and demand curves for new issues ^[2]. • Fund support – Domestic funds, including SBI Mutual Fund and its sub‑schemes such as SBI Optimal Equity Fund/SBI Emergent Fund, are key buyers that help set softer listing-day dynamics ^[3].

But the flip side isn’t pretty. Inflows have drawn in mega exits from overseas investors such as SoftBank and Temasek, with Lenskart’s value placement and international footprint fueling debate about pricing and potential post-listing exits ^[4]. Interest in the IPOs also centers on how much of the business comes from abroad (e.g., Owndays/Japan operations) ^[4].

As domestic capital grows bolder, the real test will be how pricing, lock-ins and mutual-fund allocations hold up when the initial euphoria cools ^[4].

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