After a strong performance in 2024, the initial public offering (IPO) market in India is experiencing slowdown due to a downtrend in the secondary market amid a combination of domestic and global factors that are reshaping the investment landscape. The calendar year 2025 started on a modest note, with 10 mainboard IPOs making its debut on domestic bourses in the first two months, raising a total of ₹15,983 crore, up 23% over the ₹12,990 crore garnered during the same period in 2024.

However, March concluded without a single mainboard IPO listing – the first such incident in nearly two years – as companies delayed or paused their listing plans due to sustained market volatility, weak investor sentiment, and unfavourable valuations. The stock market sentiment has reached its most pessimistic level since March 2020, which prompted big players, such as LG Electronics India and Ather Energy to pause their listing plans.

Sources suggest that both LG Electronics and Ather Energy plan to launch their IPOs by end of April or first week of May. While LG Electronics India looks to raise around ₹15,000 crore via the IPO route, which could potentially become the fifth largest in Indian history, electric scooter manufacturer Ather Energy aims to raise around ₹4,000 crore through its public issue.

India’s capital markets faced a period of consolidation in the first quarter of 2025, influenced by global uncertainties, including U.S. tariffs and their impact on investor sentiment, as per Uniqus, a tech-enabled global platform. Additionally, SEBI’s proactive regulatory measures aimed at ensuring market stability—such as increasing lot sizes, reducing the frequency of weekly index expiries, and raising margin requirements—led to a temporary decline in trading volumes, with daily turnover on stock exchanges falling by over 30% in the past six months, it added.

Companies rush to file for IPOs despite weak sentiments

Although the current sentiment in the primary market remains tepid, Q1 2025 outperformed the first quarter of 2024. Looking ahead, with a healthy pipeline of companies that have filed their DRHPs, market activity is expected to pick up once stability returns to the broader market, the report noted. 

As of today, SEBI has received approximately 144 draft offer documents, which collectively represented a proposed issue size of over ₹1.47 lakh crore (approximately $17 billion), as per the report.

The report revealed that certain companies would have delayed the listing time considering the current market conditions. 

“With 87 companies falling under the 3-month to 9-month bucket, we can expect these companies to tap the primary market once the market conditions stabilize. More than 25% of the companies (26 companies) listed in 2024, filed DRHP for the second time to get listed after an unsuccessful attempt in the earlier filed DRHP. This suggests that a significant portion of companies initially postponed or withdrew their IPO plans, likely due to unfavourable market conditions or strategic timing decisions,” it added.

According to Pranav Haldea, Managing Director, PRIME Database Group, the pipeline of issues continues to be staggering. As many as 49 companies proposing to raise ₹84,000 crore are presently holding SEBI approval waiting to hit the market while another 67 companies looking to raise about ₹1,02,000 crore are awaiting SEBI approval (Out of these 116 companies, just 4 are NATCs which are looking to raise roughly ₹8,500 crore).

In addition, scores of companies are preparing to file their offer documents soon. However, according to Haldea, given the recent market volatility, issuers seem to be in a wait and watch mode as the month of March has shown with no main board IPO being launched at all, the first time since May 2023. “An IPO is a once in a lifetime event for a company and they would rather let their approval lapse than to launch in a volatile or bearish market,” he said.

With the appointment of a new SEBI Chairman in March 2025, investors are now anticipating policy adjustments that could enhance liquidity, attract institutional participation, and create a more conducive environment for sustained growth. As economic fundamentals remain strong and corporate earnings continue to show resilience, India’s capital markets are well-positioned for a resurgence in the coming months.