India’s IPO Market Analyzed

India’s primary market experienced a record-breaking year in 2025, concluding with a total of 101 mainboard IPOs and 254 SME IPOs raising ₹1.85 trillion. This surpasses the previous year’s fundraising of ₹1.6 trillion, demonstrating sustained momentum in the market. Driven by a mix of well-known companies like Tata Capital and Lenskart, this was the second consecutive year of strong IPO activity, reflecting increasing investor confidence.

Key Points

• 101 mainboard IPOs raised ₹1.85 trillion – a record year.
• Many IPOs listed at a discount, impacting investor returns.
• Aggressive IPO pricing increased the risk of listing declines.
• Offer for Sale (OFS) IPOs dominated, driven by shareholder exits.
• Fundamentals matter more than hype, driving better post-listing returns.
• Grey market premiums are unreliable indicators of long-term success.

Despite the impressive fundraising numbers, 2025 highlighted important lessons for investors. Many IPOs listed at a discount to their initial offering prices, indicating that heavy oversubscription doesn’t guarantee profits. This was particularly evident in the retail category, where 29 out of 101 mainboard IPOs (28.7 percent) listed with a discount.

Furthermore, aggressively priced IPOs struggled on debut, like Arisinfra Solutions, which saw a 21 percent drop on its listing day. This illustrates the importance of carefully considering valuations.

A significant trend observed in 2025 was the prevalence of Offer for Sale (OFS)-heavy IPOs. Over 60% of the total IPO proceeds originated from shareholder exits rather than new capital raises. Companies like Lenskart and ICICI Prudential AMC heavily relied on OFS components, advising investors to scrutinize their post-listing performance.

Investors also shifted their focus towards companies with strong fundamentals – profitability, governance, and clear business strategies – rather than solely relying on hype. Companies like LG Electronics India and Rubicon Research, despite high subscription levels, delivered strong post-listing returns.

Crucially, the data demonstrated that indicators like grey market premiums and initial subscription numbers are unreliable predictors of long-term returns. Investors advised to exit IPOs on the listing day if they list at a discount, as a strategy to mitigate potential losses, particularly with declining listing gains.

“On the other hand, they may stay invested in fundamentally strong companies with compelling valuations, and even add to their positions, even if such companies list at a discount.” – Pranav Haldea, Managing Director, PRIME Database Group