IPO market frenzy masks weak debuts: One-Third of 2025 listings slip below issue price

IPOs in 2025: India’s IPO market has been among the most active zones for equity issuance in 2025, fuelled by a steady pipeline of public offers from fintech innovators, online-first enterprises, renewable energy companies, and consumer-facing brands.

The fundraising appetite that surged in the post-pandemic period has continued to spill over into this year, ensuring strong participation across both the mainboard and SME platforms.

But the enthusiasm masks a more restrained reality. Market experts point out that only a small slice of this year’s IPOs have managed to generate sustained value. A majority have delivered muted performance or disappointed on listing day. Of the 92 mainboard IPOs that have hit the market so far in 2025, 32 made their debut below their issue prices—highlighting that nearly one out of every three offerings failed to meet listing expectations despite receiving solid subscription demand.

Some of them include: Om Freight Forwarders, which debuted 33% lower, while Glottis saw an even steeper cut of 35%. BMW Ventures listed at a 29% discount, followed by Arisinfra Lutions, which opened 21.5% below its issue price. The weakness continued with Jaro Institute (down 16%) and Laxmi India Finance (down 15%). Quality Power fell 9%, and IndiQube Space opened 8% lower. The broad decline suggests rising investor caution amid valuation concerns and selective demand.

As markets grapple with tighter liquidity and heightened scrutiny of tech-heavy issuers, investors are now asking the obvious question: Should they continue chasing IPOs?

IPOs Offer Opportunities — But for Disciplined Investors

Market experts believe that IPO investing still offers strong opportunities — but only for those willing to be disciplined, valuation-conscious, and selective.

Vaqarjaved Khan, Senior Fundamental Analyst at Angel One Ltd, believes that the sheer volume of IPOs in FY26 should make investors more — not less — selective.

“There have been a high number of IPO offerings in H1 FY26, and the numbers have only increased in Q2 FY26. Hence, in times like this, it's best to remain selective and not blanket subscribe to all IPOs,” he said.

Khan stressed the importance of fundamentals over frenzy. He added that investors should only apply to IPOs backed by a strong track record, credible promoters, sectoral tailwinds, and appropriate pricing.

“A great company at a not-so-great price will never be able to compound one’s wealth,” he warned. Investors must compare valuation multiples — P/E, P/S, and EV/EBITDA — with listed peers rather than relying on grey-market premiums or speculative listing-gain expectations. “Yes, invest — but only in businesses offering real value.”

Divam Sharma, Founder and Fund Manager at Green Portfolio PMS, echoed the sentiment, arguing that the 2025 IPO boom has become a mixed bag.

“While the IPO market has been active, not every company warrants investor money. Focus on businesses offering genuine value and long-term growth rather than those simply pricing aggressively to provide exits to PE investors,” he said.

Sharma highlighted non-negotiables such as consistent revenue growth, healthy margins, and sustainable PAT expansion at reasonable valuations. Even for tech-led or new-age companies, he said, investors should demand clarity on growth visibility and a credible roadmap to profitability before subscribing.

What To Look For Before Applying to Unlisted Stocks/IPO?

Sharma outlined a more detailed framework for evaluating IPO-bound or unlisted companies, noting that many retail investors fall into the trap of FOMO, hoping to gain early access to high-profile start-ups. However, unlisted investing and pre-IPO participation require even more due diligence due to limited disclosures.

He recommended that investors assess:

• Benchmark valuations against listed peers and sector averages
• IPO probability and expected timelines, as not all companies list quickly
• Last funding-round valuation, ensuring recent mark-ups are justified
• Shareholding and corporate actions, which indicate internal sentiment
• Reliability of available information, since unlisted firms lack regulatory disclosure requirements

Ultimately, he warned that retail investors should treat unlisted and IPO opportunities as high-risk, long-horizon plays — not quick profit bets. In his view, “well-researched, valuation-disciplined decisions” are far more rewarding than chasing sentiment-driven movements or unofficial price chatter.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.