AFTER A BLOCKBUSTER run in 2024, the pace of activity in the IPO market has slowed in 2025 amid bearish market sentiment. In the first two months of CY25, 10 mainboard IPOs debuted on the domestic bourses versus 16 in the corresponding period of CY24.

As many as 44 companies that were set to raise over ₹66,000 crore after getting approvals from markets regulator Sebi have temporarily paused their IPOs, as per Prime Database, a capital markets data provider.

“Despite receiving Sebi approvals, some companies have delayed or paused their IPO listings due to market volatility, weak investor sentiment, and unfavourable valuations. Many are waiting for improved market conditions to ensure better pricing and investor participation,” Bajaj Broking said in a note. Factors such as global economic uncertainty, fluctuating interest rates, and sector-specific challenges have made firms cautious about their public debut, it added.

Adding to the woes are reduced subscription and stumbling performance of newly listed big-ticket IPOs such as Hexaware Technologies, Dr. Agarwal’s Health Care, and Ajax Engineering.

Even the primary market is showing signs of wariness as a sharp correction in the domestic bourses, especially mid- and small-cap stocks, amid heightened valuation concerns have left IPO enthusiasts jittery. The strong fund outflows by FIIs, slowdown in economic growth, weak corporate earnings, and global tariff uncertainty have also dampened the craze for IPOs.

“An IPO is a critical, one-time event, so choosing the perfect timing is essential. Companies aim for peak market conditions to get higher valuations. However, the recent market correction, particularly affecting small- and mid-sized stocks, is forcing many to reconsider their IPO plans or accept reduced valuations,” says Pranav Haldea, Managing Director of PRIME Database Group that provides data on the capital market.

“In the past, companies had let their IPO approvals lapse... There had been years where ₹70,000-80,000 crore worth of issues have lapsed because of adverse market conditions,” says Haldea.

The slowdown has been further impacted by subdued listing and performance of newly listed stocks. According to exchange data, eight of the 10 stocks listed in CY25 are trading below their issue price, while more than half the 2024 entrants have delivered negative returns.

The S&P BSE IPO index, that tracks the performance of IPO-listed companies, has nosedived over 21% year-to-date, compared to a 7% fall in the BSE Sensex in CY25 (as of March 4).

The IPO pipeline remains strong, with 67 firms proposing to raise ₹1.17 lakh crore awaiting Sebi’s nod. While IPO activity will continue in 2025, there is unlikely to be a frenzy like last year, says Haldea.

The Brief — IPOs

Why Sebi has paused IPO approvals for more than 44 firms