Activity in the Indian IPO market is set to hit a six-year high in 2016 as the companies looking to go public, supported by a growing appetite for equities led by rising corporate profit and uptick in economic growth, are estimated to raise over $5 billion in the year.

While initial public offering (IPO) markets in other Asian countries remained dull in 2015, domestic companies have raised funds worth $2.1 billion through public issues in the year. The combined amount raised through IPOs in India saw a seven-fold increase this year compared to 2014, whereas the activity has contracted in other markets like Hong Kong and Australia.

Apart from listing of Vodafone India, there are many financial and technology sector companies that are lined up to offer public issues in 2016, said investment bankers.

"There is a healthy pipeline of deals waiting to hit the market over the next 12 to 18 months and an equally strong investor interest to buy into these deals," Reuters quoted Sunil Sanghai, head of banking at HSBC in India, as saying.

This year, the IPO market activity was boosted by public issues from Cafe Coffee Day and IndiGo's owner Interglobe Aviation. Both the companies raised a combined Rs 3,650 crore, taking advantage of better market conditions.

The domestic IPO market had been hit by high volatility in stock markets and slowdown in the economy in the past few years. But, the steps taken by the Narendra Modi government to create an investment-friendly environment is likely to attract more foreign inflows, thereby giving a fillip to IPO activity in 2016.

Next year, India's second largest telecom operator Vodafone India is expected to raise over $2 billion through IPO, which could become the biggest issue after Reliance Power's $2.9 billion issue in 2008.

The operator has already started preparations towards issuing an IPO, but the timing of the offering would rely on market conditions, said a Vodafone spokesman in London.

HDFC Life is expected to raise over $300 million via an IPO in 2016, according to bankers. The issue will make it the first insurer to list on stock exchanges.

Other likely listings include $150-million IPO by private-equity backed Ujjivan Financial Services and $300 million issues from IT services firm L&T Infotech.

However, the government failing to pass the key reforms, particularly the Goods and Services Tax (GST) Bill, may weigh on the IPO momentum, bankers said.

"There are some concerns about delay in pushing through reforms, which if not addressed would have an impact on the corporate as well as investor sentiment, which would in turn have an impact on demand for Indian papers," said the equity capital market banker at a US bank.