THE FIRST HALF of 2025 has been eventful for India’s initial public offering (IPO) market, despite a nearly two-month drought triggered by sustained market volatility, weak investor sentiment, and unfavourable valuations. So far, 24 mainboard IPOs have raised ₹45,375 crore—45% more than ₹31,279 crore from 36 public issues in the corresponding period last year. This includes the ₹12,500-crore IPO of HDFC Bank’s NBFC arm HDB Financial Services, the largest since Hyundai Motor India’s ₹27,000-crore offering last year.

The pipeline ahead looks promising, as a growing number of firms prepare to tap the primary market, buoyed by increasingly accommodative monetary policies and improving investor confidence in the secondary market.

Bajaj Broking Research attributed the recent surge in IPO listings to favourable market sentiment, robust domestic liquidity, and a strong appetite among retail and institutional investors for new-age and growth-oriented businesses. “Many companies are capitalising on high valuations amid bullish secondary markets to raise capital and de-leverage their balance sheets or fund expansion. Additionally, Sebi’s (Securities and Exchange Board of India) regulatory reforms have streamlined the IPO process, [by] reducing timelines and encouraging more companies—especially from tech, financial services, and manufacturing—to go public,” it explained.

On the fast lane

The Indian primary market was off to a tepid start in 2025. Only 10 mainboard IPOs debuted in the first two months, raising ₹15,723 crore. Market volatility—driven by weak corporate earnings, slower-than-expected economic growth, and global concerns such as U.S. tariffs—led many companies to defer their listing plans.

There were no new mainboard launches between February 14 and May 6. Activity resumed with the listing of electric scooter manufacturer Ather Energy. Momentum returned strongly in May, as seven companies debuted and eight more followed in June.

This uptick was underpinned by a sharp rebound in the secondary market, with benchmark indices—the Sensex and the Nifty50—surging nearly 15% from their April lows. The Nifty Midcap 100 and the Nifty Smallcap index gained 25% and 33%, respectively, during the past two-and-a-half months.
The recovery was driven by easing global concerns, particularly after U.S. President Donald Trump paused his proposed “reciprocal tariffs” on trading partners, including India, until July 8. “A rising stock market creates a positive sentiment among investors, making them more willing to subscribe to new issues and often leading to higher valuations and listing gains,” says Devarsh Vakil, head of prime research, HDFC Securities.

Adding to it, retail and institutional investors (including foreign portfolio investors and domestic mutual funds) are looking to deploy excess liquidity and hence, the appetite for fresh equities is improving, Vakil explains.

Tracking performance

Given the strong domestic macro indicators, rising corporate earnings, and recovery in the secondary market, India is likely to be one of the few bright spots for global IPO activity. The pipeline remains robust, with 74 Sebi-approved companies planning to raise around ₹1.2 lakh crore, while another 84 firms seeking to mobilise around ₹1.8 lakh crore await regulatory clearance, according to PRIME Database.

Despite this substantial pipeline, the performance of the domestic equity markets will dictate the timing and success of these public debuts. The primary market consistently mirrors the prevailing conditions and investor sentiment of the secondary market, where existing shares are traded. “The primary market always follows the secondary market, albeit with a lag,” says Pranav Haldea, managing director of PRIME Database Group.

Besides, companies looking to go public face a multitude of complex challenges such as stringent regulatory requirements, financial scrutiny, market dynamics, and managing investor expectations, says Vakil of HDFC Securities.

A growing concern is the subdued listing performance of recent issues. The average listing gain for the eight mainboard IPOs that launched in early CY25 was around 5%, a sharp drop from 30% posted by 63 firms listed between July and December 2024.

“Compared to last year, the IPO euphoria is fading in 2025, as many recent issues have underperformed after listing, disappointing retail and institutional investors and raising concerns for upcoming IPOs,” says Prashanth Tapse, senior vice president (research) at Mehta Equities. Nevertheless, as the domestic rationale remains strong and intact for the long term, companies and investors are hopeful that the challenges will turn into opportunities.