New Delhi, Feb. 27 -- Domestic institutional investors (DIIs), led by mutual funds, are emerging as the decisive force in India's IPO market, reshaping how new listings are priced. Backed by relentless systematic investment plan (SIP) inflows and deeper participation in anchor books, they are exerting far greater discipline on valuations than during the 2021 IPO cycle, experts said.

"DIIs now have a significant voice when it comes to valuations as compared to the 2021 IPO cycle," said Sonia Dasgupta, MD and CEO of investment banking at JM Financial. Steady SIP inflows, she added, have boosted their influence across anchor books and public markets.

What began as consistent domestic fund flows has transformed into a structural shift in In...