The initial public offering market has sharply slowed over the past three months, marking the end of a resilient financial year for primary markets.
March is the first month in nearly two years without an IPO on the mainboard. The last time such a pause occurred was in May 2023.
Only 10 IPOs were executed in the first three months of 2025, a significant drop compared to 21 IPOs in the same period last year, according to BSE data. This decline in IPO activity follows a downturn in the equity markets, which began after the BSE Sensex and the NSE Nifty 50 peaked in September 2024.
Despite the market turbulence, the October–December quarter saw strong fundraising activity with 30 IPOs. In the third quarter of the ongoing fiscal, IPOs raised Rs 95,024 crore, but in the fourth quarter, only Rs 15,984 crore was raised, according to data shared by Mayank Mudhra, head of research at Abans Financial Services.
(Photo source: Co-pilot)
(Photo source: Co-pilot)
In the first half of fiscal 2025, fundraising efforts nearly doubled, reaching Rs 51,365 crore. The momentum continued into the second half, with companies raising around Rs 97,160 crore, bringing the cumulative total for the year to approximately Rs 1.48 lakh crore. The standout performer in this period was Hyundai India, which raised a record Rs 27,870 crore, marking the largest listing ever on the Indian stock exchanges.
However, despite these impressive figures, the IPO market has faced significant challenges in the last few months, especially in March 2025. The secondary market saw a correction, which dented investor confidence and led to a shift in focus towards managing existing portfolios instead of investing in new IPOs.
"Additionally, concerns over high valuations have led many companies to delay their listing plans, fearing a lack of investor enthusiasm," said Bajaj Broking Research.
According to the brokerage, despite receiving SEBI approvals, some companies have delayed or paused their IPO listings due to market volatility, weak investor sentiment, and unfavorable valuations.
"Many are waiting for improved market conditions to ensure better pricing and investor participation," the brokerage added.
Why Have IPOs Declined In 2025?
"The IPO market in 2025 has been relatively quiet compared to 2024 due to a combination of market volatility, liquidity concerns, and regulatory scrutiny," according to Bajaj Broking Research.
Weak corporate earnings in the July-September and October-December 2024 quarters, coupled with global headwinds, further eroded market confidence and slowed both secondary and primary market activity.
The political developments surrounding Donald Trump’s US presidential victory in November 2024 accelerated outflows from emerging markets like India. The resulting concerns over US trade policies, rising bond yields, and a stronger greenback prompted foreign portfolio investors to retreat from India.
Not only volatility and global headwinds, but stricter SEBI regulations have also impacted the IPO markets.
"Stricter SEBI regulations on disclosures and pricing have also made companies reconsider their IPO timelines," added Bajaj Broking Research.
Will IPOs See Recovery?
(Source: Grok)
(Source: Grok)
During January-March 2025, the Nifty Midcap 100 dropped 9.95%, and the Nifty Small Cap 100 plunged 15.8%. However, March has seen a slight rebound in broader market performance, with Nifty up 6.68%, Nifty Midcap 100 rising by 7.91%, and Nifty Small Cap 100 gaining 8.96%.
"The domestic market is showing indications of recovery, supported by low inflation and a strengthening Indian rupee, which points to strong foreign inflows. These factors suggest that IPO activity could pick up again in the coming months as market conditions improve," said Rajnath Yadav, senior research analyst at Choice Broking.
Beginning from April, companies such as Tata Capital, LG Electronics India, HDB Financials, ICICI Prudential AMC, Lenskart, Manipal Hospital, and PhonePe, among others, are planning IPOs of size of over $1 billion signaling a potential resurgence in IPO activity, according to Narinder Wadhwa, managing director and chief executive officer of SKI Capital Services Ltd.
However, he said the success of these issues will depend on market stability, foreign investor participation, and overall risk appetite. If volatility subsides and valuations become more attractive, the IPO market could see a strong rebound in the coming months.
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