India’s primary market is witnessing a striking divergence between activity and returns. While the number of IPO listings has surged to a record 99 in FY25-26 (as of mid-February), average listing gains have slumped to just 8.88%, the lowest in seven financial years, according to data compiled by IPO Central.

This marks the first time since FY18-19 that average listing gains have slipped into single digits. The data also shows that only 65% of IPOs in FY26 debuted above their issue price, underscoring weakening investor enthusiasm on listing day.

The data showed that average listing gains stood at 29.39% in FY24-25 and 28.61% in FY23-24. Even in FY22-23, considered a relatively muted year, gains averaged 10.45%, still above the current level. The last comparable trough was FY18-19, when listing gains had fallen to just 2.02%.

Volumes surge, returns shrink

Over the past seven years, India’s IPO market has expanded dramatically in scale. Listings have risen from 18 in FY18-19 to 99 in FY25-26, thanks to deeper retail participation and strong fundraising appetite. However, returns have not kept pace with volumes.

“India's primary market continues to be in a paradoxical situation with the number of IPOs touching a multi-year high even as the listing returns continue to disappoint investors. This is the first time in the last seven financial years that listing returns have slipped to single digits,” said Anil Sharma, Co-founder of IPO Central.

According to Sharma, multiple factors have weighed on debut-day performance. “High volatility due to geopolitical tensions, fully priced offers, and instances where retail-funded mutual funds bailed out poorly subscribed IPOs have contributed to these disappointing numbers,” he said.

After peaking at 35.84% in FY20-21 and 32.31% in FY21-22 during the post-pandemic liquidity boom, listing gains have steadily moderated. The fall to 8.88% suggests aggressive pricing and abundant supply may be diluting investor appetite.

The irony, Sharma noted, is that post-listing performance has been even more sobering. Several recent IPOs have corrected by as much as 60% from their peak levels, eroding wealth for investors who entered beyond listing day.

Animesh Hardia of 1 Finance observed that the structure of IPO fundraising has evolved significantly. “India's IPO market is bigger and more active than ever, but the underlying purpose has changed. Today, a majority of the capital raised in IPOs goes to sellers, not to the business. That means retail investors are often funding exits for promoters and early backers at prices set during periods of high enthusiasm. The listing pop feels rewarding, but the data shows it fades fast,” he said.

“If you're putting money into an IPO, the first question should be this: Is this capital building the business, or is someone cashing out? The answer changes everything,” Hardia added.

CY26 activity slows after record 2025

Fundraising momentum has moderated in calendar year 2026 so far. Only five companies - Aye Finance (₹1,010 crore), Fractal Analytics (₹2,833.9 crore), Shadowfax Technologies (₹1,907.3 crore), Amagi Media Labs (₹1,788.6 crore) and Bharat Coking Coal (₹1,071.1 crore) - have collectively mobilised ₹7,610 crore from the primary market.

This week, Gaudium IVF & Women Health’s ₹160 crore IPO opened for bidding. Three more  - Clean Max Enviro Energy Solutions (about ₹3,100 crore), PNGS Reva Diamond Jewellery (around ₹380 crore) and Omnitech Engineering (around ₹583 crore) - are set to launch next week.

The slowdown in CY26 follows a blockbuster 2025. Calendar year 2025 emerged as a watershed year, with 103 Indian corporates raising an all-time high ₹1,75,901 crore through mainboard IPOs, about 10% higher than the previous record of ₹1,59,784 crore raised by 91 IPOs in 2024.

Activity was particularly strong in the second half of 2025. October alone saw ₹45,187.66 crore raised across 10 issues, while September recorded the highest monthly deal count at 25 IPOs.

Pipeline remains robust

According to PRIME Database Group, the pipeline remains formidable. As of now, 96 companies proposing to raise around ₹1.25 lakh crore have already secured SEBI approval, while another 106 companies seeking to mobilise approximately ₹1.40 lakh crore are awaiting clearance. In addition, several companies, including 85 new-age technology firms planning to raise nearly ₹1.50 lakh crore,  are preparing to file their offer documents.