The landscape of initial public offerings (IPOs) has witnessed a significant downturn in 2025, with a staggering 62% decrease in activity compared to the previous year. This decline can be attributed to a mix of both global and domestic influences that have left investors cautious.
Current IPO Trends
As of now, 10 IPOs have collectively raised ₹18,704 crore in 2025, in stark contrast to 27 public offerings that garnered ₹24,437 crore during the same period in 2024. Despite the drop in the number of offerings, the average size of these IPOs has seen a remarkable increase, escalating from ₹905 crore to ₹1,870 crore.
- Notable IPOs this year include:
- Hexaware Tech: ₹8,750 crore
- Dr Agarwal’s Health Care: ₹3,027 crore
- Ather Energy: ₹2,981 crore
Performance Post-Listing
Unfortunately, many of this year’s IPOs have struggled since their market debut. At least six companies, including Ather Energy and Quality Power, are currently trading below their issue prices. Meanwhile, Indo Farm and Stallion India have experienced declines exceeding 38% from their initial offering prices.
This performance has led to a more cautious approach among both retail and institutional investors. As a result, several companies are postponing their IPO plans, even after securing approvals from the Securities and Exchange Board of India (SEBI).
Key concerns include:
- Ongoing geopolitical tensions
- Uncertainties regarding tariffs
While recent developments, such as a ceasefire between India and Pakistan, have eased some geopolitical worries, investor anxiety persists, particularly regarding tariff issues under the Trump administration.
Investor Sentiment and Future Outlook
Market analysts maintain a positive outlook despite current challenges. Some significant investors are focusing on private companies, anticipating lucrative returns from future listings. Lakshmi Iyer, CEO of investments and strategies at Kotak Alternate Asset Managers, which oversees $20 billion in assets, expressed optimism, stating, "There is significant interest in private firms among portfolio management and alternative investment funds."
The IPO pipeline remains robust, with around 80 companies having submitted draft prospectuses, and roughly half securing SEBI approvals. The most active sectors for upcoming IPOs include:
- Industrials
- Real Estate
- Life Sciences
- Hospitality
- Construction
Outstanding Returns from Previous IPOs
The IPO market in 2024 showcased remarkable performance, with several listings providing stellar returns. For instance, Jyoti CNC Automation exceeded 150% returns, while Bharti Hexacon surpassed 100%. Major listings, such as Hexaware Technologies and Hyundai Motors, which raised significant funds, have positioned India as a leading player in the global IPO arena.
Competitive Landscape
“There is fierce competition among institutions and retail investors for IPOs that present value,” noted Nikhil Rungta, co-chief investment officer at LIC Mutual Fund, which manages ₹37,554 crore in assets.
The Road Ahead
Both analysts and institutional investors are hopeful for a resurgence in the IPO market over the next six to twelve months. This optimism is bolstered by anticipated interest rate cuts, reduced market volatility, and robust corporate earnings. However, Iyer cautions that “strong corporate earnings are already factored into current market valuations,” which might present risks.
The diversity within the issuance pipeline, along with sustained interest from domestic investors and foreign portfolio funds, suggests a potential rebound in IPO activity, provided macroeconomic conditions stabilize.
