Market analysts are not bullish on a rerun of the 2024 IPO (initial public offer) euphoria in 2025 as companies take a pause and re-evaluate floating their issues in a volatile equity market.
Year 2024 was a record year in terms of capital raised from the equity market. A total of 91 corporates raised an all-time high of ₹1,59,784 crore through mainboard IPOs, which was three times more than the ₹49,436 crore mobilised through 57 IPOs in the mainboard in 2023. Considering the listing on the SME exchanges, India’s total number of IPOs was 327, which was significantly more than 183 in the US, 115 in Europe (excluding the UK) and 98 from the Chinese mainland, according to the EY global IPO trends report.
At the start of 2025, the IPO pipeline comprised 28 companies with Sebi approval looking to raise ₹46,000 crore, while around 80 companies were awaiting Sebi approval with plans to raise around ₹1,32,000 crore and the broader expectation was that of yet another record-breaking year for IPOs in India.
But since January, the benchmark indices in India have seen a sharp correction. From a high of 79943.71 on January 2, 2025, the 30-stock Sensex has fallen to 74332.58 as of March 7, 2025. The 50-stock Nifty fell from 24188.65 as of January 2, 2025 to 22522.50 as of March 7, 2025. This comes amid tariff salvos, uncertainty around the Russia-Ukraine war and Europe’s renewed bid for rearmament.
With secondary market performance being a sentimental barometer for the primary issues, only 11 companies have listed so far in 2025 and six of them are trading at prices which were lower than the issue price. Around 42 companies of the 91 listed on the mainboard in 2024 are currently trading below the issue prices.
Analysts are expecting companies to either hold back their listing for a few months or revise their issue size, a recent example being rooftop solar provider Fujiyama Power Systems reportedly refiling their draft prospectus and reducing the fresh issue size to ₹600 crore from ₹700 crore earlier.
“Last year’s IPOs came riding a bull market. Markets were good till September and there were around 65 odd issues in the first nine months. Those issues have suffered more than the others. Valuations across the board were expensive last year. Because the market is correcting itself, these companies are trading below their issue price and well below their highs,” Arun Kejriwal, founder of Kejriwal Research and Investment Services, told The Telegraph.
“Over the last few days, there have been no IPOs coming to the mainboard. This clearly shows that promoters and merchant bankers are not yet aligned with the new reality of the market. The next two months are going to be critical. What could happen in May will depend entirely on the secondary market. If the market rebounds, we could see more issues coming,” he said.
“IPOs kind of feed on what is happening in the secondary market. From 2019-2023, India saw 50 $1-billion deals across IPOs, QIPs (qualified institutional placements) and blocks. In 2024 alone we saw 11 deals. It was the result of how the market was behaving at that point of time,” Jibi Jacob, MD and head of equity capital markets, Jefferies India, said at an event organised by Moneycontrol.
“Unless the market rebounds quickly, it might be a tough ask,” he said on expectations of another record year of IPOs.
Rahul Saraf, head of investment banking, Citi India, however, remains optimistic.
“A lot of the IPOs in the pipeline are likely to be OFS (offer for sale). Businesses do not need capital immediately. So the issuers can time the market and if the market is soft as it is today, people have the luxury and flexibility to defer it by three months or six months,” he said.
Some of the big-ticket IPOs that the investors will look forward to in the future include Tata Capital, Lenskart, Manipal Hospitals, Zepto and LG among others.
