The IPO Boom is a Distraction: Why India's Real Wealth Shift is Private

The structure of Capital Markets is shifting and so are the investing principles

With global private markets expanding in growth from $9 trillion (2012) to $24.4 trillion (2023). Private Equity continues to outperform public equity and with India now accounting to 20 percent of all PE-VC investments in Asia, it looks like the retail investor in India is looking to shift its focus to alternative investments.

The private markets in India follow the general framework of limiting direct investments to HNIs and institutions thereby making them Limited Partners (LPs), With direct investments from retail investors still highly regulated but with the growing influence and power of Individual investors seen by a staggering 21 crore demat accounts (as of late 2025), It is evident that private markets have to now make space for the regular investor too.

The Current Story

Presently a regular investor put their money in private markets by pooling funds by feeder funds, fund of funds (FoFs) or investing in publicly Listed Investments Trusts (LITs) etc, The GOI and SEBI are actively trying to bridge the gap between regular investors and private markets even introducing SIFs (specialized investment funds) in effect as of April 2025.

While these tools are helping small time investors gain more returns, SEBI still hasn’t completely opened up the private space for regular investors as there is a major difference in how you make money in private and public markets, with public markets offering short term returns, private markets focus more on long term wealth creation in exchange of illiquidity, long lock-in periods and higher volatility, considering these risks is essential for any retail investor before investing.

The Unique India problem: So, the question is if Private Markets are the future why India is currently facing the “unique IPO boom”: this is largely due to two major reasons:

1.) Transition phase: VC cycle is exhausted, with 10-year lock-in periods now coming to end for major Indian startups and
2.) Due to lack of depth in debt markets of India and prestige surrounding the IPO listings, companies are shifting towards public listings currently but indeed with private markets deepening and maturing India too will follow the rest of the world in the staying private trend.

And thus, as the growth of private markets and related commodities go up, so do the changes in the investment principles of an average investor, who now chases wealth creation instead of short-term returns.