Amid ongoing tensions and rising uncertainty in India’s secondary markets — driven by the looming threat of conflict between India and Pakistan — the primary market witnessed a rare but noteworthy IPO launch after a prolonged lull. Adding to the development, EY recently released its report outlining global and Indian IPO trends for the first quarter of CY2025, highlighting India’s impressive performance in the global IPO space.
In this context, let’s take a closer look to assess whether the recent slowdown in IPO activity is nearing a turning point.
What’s Happening?
According to EY’s latest report covering global IPO trends — including India — there were 291 IPOs launched globally in Q1 2025. Out of these, 62 IPOs were listed on Indian exchanges (NSE and BSE), accounting for 22% of global IPO activity during the January–March quarter.
India emerged as the world’s leading IPO market in early 2025, surpassing several major economies.
During the quarter, Indian companies raised $2.8 billion through 62 IPOs. It placed India fourth globally — behind the US (NASDAQ and NYSE combined) and Tokyo — demonstrating resilience despite global headwinds such as tariff wars and geopolitical tensions.
India ranked fourth globally in IPO proceeds, contributing 10% to global capital raised.
However, IPO activity in India dropped 20% compared to Q1 CY24, when 82 IPOs were listed. This decline reflects cautious investor sentiment, further evidenced by a 1.1% dip in the BSE Sensex during the quarter.
Profitable IPOs, Muted Market Mood
India’s IPO landscape in Q1 CY25 saw a notable increase in the number of profitable companies going public, though debut-day market enthusiasm remained subdued.
According to EY, 90% of Indian IPOs in Q1 CY25 were profitable at the time of listing — a significant rise from 56% in Q1 CY24. In comparison, the US saw a jump from 29% to 59% in the same period.
India’s IPO market in Q1 CY25 sees higher profitability in new listings, but a muted response on debut.
Despite stronger fundamentals, investor response was lukewarm. Only 63% of Indian IPOs delivered positive first-day returns in Q1 CY25 — down from 83% a year ago. This drop suggests that, while financials have improved, investors are still exercising caution.
India’s surge in IPO profitability was among the most significant globally, even as debut-day performance saw a general decline worldwide.
Sectors and Rising Retail Investor Participation
The EY report highlighted strong performance across sectors, with healthcare emerging as a standout in terms of IPO activity. Investor interest in healthcare firms has grown markedly.
Prashant Singhal, Partner and Markets Leader at EY India, remarked that the substantial capital raised in Q1 2025 showcases the strength of India’s capital markets. He also noted that a record number of mergers and acquisitions (M&As) reflect the maturity of the market. Both domestic and foreign investors are playing an increasingly pivotal role in driving IPO and M&A momentum.
Another key trend is the rise in retail investor participation. Individual investors are entering the IPO space in greater numbers, attracted by promising returns and confidence in the Indian economy. The uptick in profitable IPOs has further encouraged this segment.
What’s in it for Investors?
During the trade wars and tariff tensions under Trump-era policies, global markets — including India — faced intense pressure. However, as those uncertainties began to fade, markets started recovering, with India rebounding faster than most.
Many companies delayed IPO plans amid market corrections, reluctant to raise capital at discounted valuations. That trend may now be reversing. For instance, Ather Energy is expected to make its debut in May, alongside several SME IPOs, signalling renewed activity in the primary market. For investors, this could be an opportune time to re-engage.
What’s Next?
The strong performance in Q1 has laid a solid foundation for the coming quarters, despite lingering investor caution. A robust pipeline of companies is preparing to go public, indicating likely momentum in the months ahead.
Foreign Institutional Investors (FIIs) turned net buyers in April, reversing their earlier selling trend, which had totalled nearly Rs 35,000 crore. Meanwhile, Domestic Institutional Investors (DIIs) continued to provide strong support through steady buying. However, on a year-on-year basis, FIIs remain net sellers, offloading Rs 1.37 lakh crore worth of equities, while DIIs have purchased a net Rs 2.04 lakh crore during the same period.
India continues to be an attractive destination for both domestic and global companies looking to list, because of its robust economic fundamentals and rising investor participation.
*The companies mentioned in the article are for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
