Retail appetite for IPOs drops despite record ₹1.30 lakh crore fundraising

The initial public offering (IPO) market is on track for record fundraising in 2025, primarily driven by strong domestic liquidity, growing retail participation, and a robust pipeline of new offerings. In the first 10 months of the current calendar year (Jan-Oct), more than 80 companies have mobilised a record ₹1.30 lakh crore, the highest ever in the first 10 months of any calendar year.

While the headline narrative of 2025 is record-breaking capital mobilisation, the underlying story is the evolution of retail behaviour. After two years of aggressive participation, fuelled by liquidity and strong listing gains, retail investors are now prioritising fundamentals, size, and pricing discipline.

Fresh data compiled by PRIME Database Group shows that retail participation in IPOs has dipped visibly compared to 2024, despite the frenetic pace of market activity. In 2025 (till October), average retail subscription fell from a record 34.15x last year to 26.42x this year. The retail investors made 11.52 crore applications, sharply lower than 17.17 crore applications in 2024.

This can be attributed to the softening interest in valuation concerns, particularly in new-age and large-cap issuances, and the growing dominance of offer for sale (OFS) structures, where existing shareholders exit instead of fresh capital being raised. Many investors, seasoned by a volatile secondary market, appear to be picking their bets more selectively, said analysts.

Small-cap, low-issue IPOs dominate retail frenzy

As per data shared by Prime Database, smaller issues continued to draw strong demand. Quadrant Future Tek, a modest ₹290-crore issue, topped the charts, receiving 40.6 lakh applications and getting subscribed 256.63 times. Similarly, BLS E-Services (226.49x), Vibhor Steel Tubes (197.91x), Borana Weaves (192.74x), and Dev Accelerator (160.88x) saw strong demand, largely driven by their smaller issue sizes, affordable price points, and strong listing pop expectations.

Large issues struggle for retail attention

On the other hand, several marquee names witnessed muted to downright weak retail interest. Hexaware Technologies’ ₹8,750-crore IPO barely got off the ground in the retail category, logging just 0.10× subscription. Dr. Agarwal’s Health Care (0.39x), Canara HSBC Life Insurance (0.40x) and Hyundai Motor India—despite being among the most anticipated listings of the year—came in at 0.44x. Even WeWork India, a well-known brand, mustered only 0.57x from retail investors.

According to market analysts, high valuations, large ticket sizes, and issues dominated by OFS components appear to have driven retail investors to the sidelines.

Average listing gains down 70% from last year

The data also shows that listing gains have fallen sharply this year, dropping to a single-digit 9.1% in 2025 (till October)—a clear shift from last year’s high enthusiasm to more selective retail participation. This reflects a steep 70% decline from the 30.25% average gain in 2024, and is also well below the 28.68% average in 2023. The trend is more in line with 2022, when 40 IPOs listed and delivered a modest 10.72% average return.

According to Pranav Haldea, Managing Director of PRIME Database Group, the decline in debut-day gains is closely linked to broader market volatility. The BSE Sensex has returned just 6.5% YTD (till Oct 2025), compared with more than 8% in 2024.

“Listing gains are typically influenced by the performance of the secondary market, and they tend to be higher in strong market conditions. The volatility and choppiness over the past year have led to subdued listing gains in 2025,” Haldea says.

He adds that retail investors—who often participate in IPOs for short-term listing benefits—have become more cautious.

“Retail investors generally come in for listing gains. This affects their demand, which is already visible in the lower number of retail applications and reduced oversubscription compared to last year,” he notes.

On the debate around pricing, Haldea says broad statements are misplaced. “It is not fair to generalise. Each IPO must be evaluated on its own merit in terms of valuation.”