@Dixan Thomas Welcome to Microsoft Q&A Forum, Thank you for posting your query here!
I understand that you want to implement Single Sign-On (SSO) in Azure API Management (APIM) using Integrated Windows Authentication (IWA). You want to authenticate the user accessing the API using IWA, so that the user no longer needs to go to a sign-in page like every other web app authentication. Instead, the authentication happens using the Windows credentials from the system the user is signed in or using.
The integrated Windows Authentication is not supported by APIM. So, this is not a supported scenario. Authentication and authorization to APIs in Azure API Management is explained here.
Please note in many customer environments, OAuth 2.0 is the preferred API authorization protocol.
Though not the same ask as yours, but a similar request was raised here. On a side note, if you want to use the NTLM windows authentication for your backend API via APIM you can rely on the proxy policy
Hope this answers.
**
Please do not forget to "Accept the answer” and “up-vote” wherever the information provided helps you, this can be beneficial to other community members.