India’s primary market has remained a hotspot for investors in recent years. However, IPOs in 2024 and 2025 have disappointed many, with most trading below their listing prices. According to exchange data, 6 out of 11 IPOs listed in 2025 are currently trading below their issue price — despite receiving strong subscription responses during their public offers.
Let’s explore why most IPOs are trading below their listing prices and what the sluggish IPO pace in 2025 means for investors.
What’s Happening?
After a few slow months, companies are cautiously returning to the IPO route, encouraged by the market’s ongoing recovery rally. Given the growing popularity of IPOs among retail investors, it’s worth reviewing how newly listed companies have performed over the past year.
As per ETIG, since January 2024, 101 mainboard companies have raised funds through IPOs. Yet, most of them are trading below their listing price — meaning two out of every three companies are underperforming post-listing.
Although listing gains often attract retail investors, data shows that only 16% of companies delivered over 50% listing gains, and just 9% offered returns above 75%. Meanwhile, 17 companies gave gains of up to 10%, and 20 didn’t offer any gains at all. This highlights a key risk — investing in IPOs without proper due diligence can lead to losses.
Why the Weakness in the Indian IPO Market?
After becoming the world’s second-largest IPO market in 2024, India’s primary market is now going through a phase of consolidation. Global economic uncertainty, changing investor sentiment, and geopolitical risks have made companies more cautious about their listing timelines.
According to PRIME Database, the number of mainboard IPOs fell from 26 in Q2 FY25 and 29 in Q3 to just 9 in Q4. IPO activity has declined by 58% this year, and total funds raised across all listing platforms are down 18%.
Why Are IPOs Underperforming?
Overvaluation: Many IPOs were priced too aggressively, leaving little room for attractive returns. Companies and bankers often set high prices to maximise their gains.
Weak Secondary Market: From September 2024 to April 2025, the Indian stock market saw a consistent decline, affecting IPO performance.
Economic Uncertainty: Global concerns, geopolitical tensions, and trade wars have increased volatility, dampening IPO activity and returns.
Poor Listing Gains: Only 16% of IPOs delivered over 50% listing gains, while 20 offered no returns, leading to lower investor confidence.
What Should Investors Know?
According to Fortune India, market experts believe this IPO slowdown may be temporary. Despite tensions like India-Pakistan strains, Trump’s tariff threats, and global growth worries, the secondary market has shown strong recovery.
Domestic indices like BSE Sensex and NSE Nifty have risen over 10% from their recent lows. This rally is backed by supportive monetary policy, a strong economic base, and favourable market conditions.
What’s Next?
After a slow start to 2025, the IPO market is regaining momentum. Six mainboard IPOs are scheduled to launch this month. According to NDTV Profit, investment bankers estimate these companies will raise over Rs 11,000 crore collectively.
So far in 2025, only 10 companies have launched IPOs, mainly due to equity market volatility caused by FII selling and geopolitical tensions. This contrasts sharply with 2024, when 91 IPOs raised Rs 1.6 lakh crore — driven by strong retail participation, a stable domestic economy, and a rise in private capex.
*The companies mentioned in the article are for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
