2025 IPOs Explained: Why Easy Listing Gains Are No Longer Guaranteed

India’s IPO market in 2025 has continued to remain active and relevant for retail investors, but the nature of opportunities has clearly evolved compared to the last couple of years. While fund-raising numbers remain strong and the pipeline is healthy, the era of easy and assured listing-day gains has largely cooled off, especially for mainboard IPOs. For investors, this shift signals a more mature and disciplined primary market where pricing, fundamentals, and long-term business prospects matter far more than short-term excitement.

From a big-picture perspective, 2025 has still been a busy year for IPOs in India. In the first nine months itself, close to 80 mainboard companies tapped the market and raised over ₹1.2 lakh crore. This already places 2025 among the strongest IPO years in the past five years in terms of capital raised. With several large issues lined up in the last quarter, total mainboard fund-raising is expected to approach ₹2 lakh crore for the full year. This clearly shows that despite volatile equity markets and cautious investor sentiment, companies continue to see India’s primary market as a reliable source of capital.

Alongside mainboard IPOs, SME IPOs have also remained very active. Smaller companies from manufacturing, chemicals, healthcare, engineering, and consumption-linked sectors have regularly accessed the market. These issues are largely driven by retail and HNI participation rather than big institutions. While some SME IPOs delivered sharp listing gains, they also came with higher volatility and liquidity risks, making them suitable only for investors with a higher risk appetite.

 A key aspect investors need to understand is the mix between fresh issue and offer for sale in 2025 IPOs. Many companies raised fresh capital to fund capacity expansion, reduce debt, or support working capital needs. These IPOs are generally viewed positively as the money directly strengthens the company’s balance sheet. At the same time, several consumer, technology, and platform-based businesses came with a sizeable offer-for-sale component. In such cases, early investors or promoters used the IPO to partially exit their holdings. While OFS is not a negative by itself, a very large OFS relative to fresh issue does raise questions around valuation and growth visibility, especially for retail investors entering at IPO prices.

The most noticeable change in 2025 has been the moderation in listing gains. Average first-day returns have fallen sharply compared to 2024. Instead of 30 per cent plus gains being common, average listing gains are now closer to high single digits or low teens. In fact, less than half of the IPOs this year delivered positive listing-day returns. Several stocks listed flat or even below their issue prices, particularly where valuations were aggressive or broader market sentiment was weak. This trend reflects a more realistic pricing environment and a secondary market that itself has delivered muted returns.

Despite this overall moderation, there were still clear winners and losers. A few infrastructure, consumer, technology-linked, and specialty chemical companies delivered strong listing gains of 40–70 per cent, driven by strong demand and positive sector outlook. At the same time, certain logistics, niche industrial, and financial names disappointed sharply, listing at double-digit discounts due to overpricing or lack of investor confidence. This wide divergence highlights the importance of selectivity.

For Indian retail investors, the key takeaway from the 2025 IPO market is clarity of approach. IPOs should no longer be seen as guaranteed listing-gain opportunities. Instead, investors should focus on understanding the business model, how the IPO proceeds will be used, and whether the valuation leaves room for long-term growth. Chasing grey market premiums or subscription numbers alone can be risky in the current environment. Extra caution is also needed in SME IPOs, where liquidity can dry up quickly after listing.

In summary, the 2025 IPO market rewards informed and patient investors rather than short-term speculators. For those willing to look beyond day-one performance and invest in fundamentally sound businesses, IPOs can still play a meaningful role in long-term wealth creation.

Disclaimer: The article is for informational purposes only and not investment advice.