“The recent sell-off by foreign institutional investors (FIIs) in Indian equities has impacted the IPO market, particularly for new-age companies in the tech, AI, and fintech sectors,” said Mahavir Lunawat, Managing Director, Pantomath Capital Advisors. Traditional companies with strong fundamentals are being preferred over these new entrants, as investors become increasingly risk-averse due to global economic uncertainties, rising U.S. bond yields, and geopolitical risks, he said.

“The withdrawal of FIIs has made investors cautious about new IPOs. In this environment, investors are favouring established companies with proven track records over riskier new listings,” he said.

However, he expects the record-breaking IPO trend from 2024 to continue, with over 90 companies having filed draft prospectuses to raise approximately ₹1 lakh crore ($11.65 billion). India's position as Asia's leading market for IPOs, surpassing China in 2024, is also expected to be maintained in 2025, said Lunawat of Pantomath Capital.

Vaibhav Porwal, co-founder, Dezerv, said that IPOs will remain an important component of the market, but 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. 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 explained.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)

IPO filings

IPO frenzy over? DRHP filings drop by 50% in Feb amid market rout