The Indian equity market has seen one of the worst routs so far in 2025, with benchmarks BSE Sensex and NSE Nifty falling nearly 4% year-to-date (YTD), impacted by continued sell-offs by foreign institutional investors amid valuation concerns coupled with weak corporate earnings. The looming fear of a possible global trade war following U.S. President Donald Trump’s tariff policies further dented sentiments.

The poor performance of the secondary market has negatively affected the primary market, as investors are less willing to invest in newly issued securities amid concerns about the overall market health and potential lack of liquidity for their future investments. As a result, the demand for IPOs has declined significantly as investors have become more risk-averse and less inclined to invest in new companies through the primary market.

A Quiet Beginning for IPOs in 2025

The Indian stock market saw eight mainboard listings in the first two months of 2025, where they collectively raised ₹6,375 crore via the initial public offering (IPO) route. This is 40% lower than the ₹10,763 crore raised by 16 mainboard companies during the same period last year. It is notable that the IPOs of Hexaware Technologies (₹8,750 crore) and Quality Power Electrical Equipments (₹858.70 crore), which opened last week, are yet to make their debut on the domestic bourses.

The IPOs that debuted so far in 2025 are Indo Farm Equipment, Denta Water and Infra Solutions, Stallion India Fluorochemicals, Quadrant Future Tek, Standard Glass Lining Technology, Laxmi Dental, Ajax Engineering, and Dr. Agarwal's Health Care.

As per the latest exchange data, five out of 8 listed IPOs in 2025 are trading below their issue price despite receiving strong responses for their public offerings. Barring the big-ticket IPOs of Dr. Agarwal's Health Care (₹3,027 crore) and Ajax Engineering (₹1,269 crore), all other six new entrants of 2025 received overwhelming responses from investors, with an average subscription of 189 times. The issue of Dr. Agarwal's Health Care was subscribed merely 1.49 times, while that of Ajax Engineering was subscribed 6.06 times.

The worst performer among the 8 listed entities of 2025 is Laxmi Dental, which has corrected nearly 57% from its listing price. The stock made a stellar debut and touched its highest level of ₹583.70 on its listing day, January 20. Today, the stock slipped to its lowest level of ₹358.50 in intraday trade, falling 18% below its issue price of ₹428. The dental care firm raised ₹698 crore via IPO, which garnered an overwhelming response from investors, with the issue subscribing 114.14 times.

On the flip side, Quadrant Future Tek’s IPO has emerged as the top performer, delivering a massive return of 68% to its shareholders against its listing price. The railway-related stock, which debuted on January 14, touched its highest level of ₹743.45 on February 6, rising sharply from its issue price of ₹370. Currently, the stock trades around ₹508, as it saw some profit booking amid weakness in the broader market. The company, specialised in research and development of advanced train control and signaling systems for the Indian Railways, raised ₹290 crore via IPO, which garnered 195.96 times bidding.

According to industry experts, current market volatility poses a significant challenge for new offerings, as investors may become more cautious and postpone their investment decisions until the market stabilises.

“While IPOs will remain an important component of the market, they are expected to be less dominant than last year. An oversupply of listings, coupled with a recent market correction, is likely to make investors deploy capital more cautiously,” says Vaibhav Porwal, co-founder of Dezerv.

This environment is steering the focus away from a broad-based IPO frenzy toward a more selective approach, with investors favoring high-quality stocks that align with the current macroeconomic conditions, he adds.

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