India’s IPO market that had been very active has come to a standstill in May 2025. After a record year in 2024 we see a sharp reversal. We are seeing put off of listings and investor demand which is dying down all due to volatile offshore markets. The sudden drop in price has taken issuers and analysts by surprise. Although some have large issue pipelines which support them, many companies are still sitting out.
Record-Breaking 2024, But 2025 Is Different
In 2024 Indian’s IPO market saw record numbers. India was second to the US which reported the largest. That year had over 90 IPOs and billions of capital raised. It was a great era for market debuts.
But in 2025 we see a different picture. This year so far we have had only 11 companies that went live on the Bombay Stock Exchange. Capital raised is down by 18% and new listings are 58% lower. Companies are clearly playing it safe in a climate of economic headwinds.
India’s issue of new shares is dealing with global uncertainty
India’s IPO market is seeing action as the world is in the midst of turmoil. India was in the midst of large scale wars and also of the U.S. tightening up on monetary policy which is what is affecting investment sentiment.
Most issuers are rethinking when to push forward with their plans. Avanse Financial Services and Anthem Biosciences also saw fit to delay their initial public offerings. What is the issue? Very low anchor investor interest. In a climate of that which does not see large scale support from institutions, IPOs which do not have that don’t fare well.
Investors have been tilting towards large cap stocks which are seen as safe plays as against the high risk high return Initial Public Offerings reports Suraj Krishnaswamy of Axis Capital. At this point in time seeing a trend which is more toward cautionary approach rather than a aggressive investment strategy.
India’s IPO markets face out.
India’s IPO market is also seeing a lot of domestic issues play out. SEBI’s push for more regulation has caused delay in the approval processes and also we see very strict disclosure requirements. While these changes do improve in terms of transparency, what we are also seeing is that they have introduced inefficiencies into the listing process.
Apart also that tight money markets which are a result of high interest rates and persistent inflation. What we have is a retreat from risk by retail investors which in the past were very active in Initial Public Offerings. Also we are seeing that individual traders’ participation which we used to in the past is down in recent issues.
Even for Ather Energy’s issue which saw good subscription had low retail interest. This is a reflection of a larger trend of declining investor sentiment.
India’s IPO market may see a upturn in 2025 second half
Despite the cold present, India’s IPO market is doing well. In Q1 2025 the country reported a 22% share in global IPO activity that is a reflection of it’s base strength. Also names like Tata Capital and Reliance Jio at the fore for great IPO’s in the latter part of this year. If macro economic conditions do indeed turn around and foreign investments continue to flow in, the second half of 2025 may see a rise in that trend. Institutions are on the lean side of positive. With foreign portfolio investors back as net buyers in April have a rekindled hope for recovery.
