IPO boom faces reality check as nearly half of 2025 listings slip below issue price

Mumbai: After euphoria swept India's primary market to a record in 2025, it faces a reality check. Nearly half the companies that went public this year are trading below their initial public offer (IPO) price, highlighting a disconnect between listing-day enthusiasm and sustained investor interest.Of 103 companies that debuted on the bourses, 69 listed above their IPO prices, while 33 opened below. However, this initial momentum proved short-lived for several of them. By year-end, 54 stocks are trading above their issue prices, as of December 26, while 47 are trading below."Many big-name IPOs saw strong initial enthusiasm but failed to sustain valuations post-listing," said Dev Chandrasekhar, partner at Transcendum, a valuation branding advisory. "Without fresh capital for growth initiatives, these companies must rely entirely on operational improvements to justify premium valuations, a tougher ask in competitive markets."Mainboard IPOs this year raised an unprecedented ₹1.75 lakh crore, marking the highest level of equity capital mobilisation on record, while 267 companies raised ₹11,429 crore on the small and medium enterprises (SME) platform. 126222204 Rewarding QualityThe 10 biggest laggards among stock market debutants this year have been shares of companies with IPO sizes below ₹1,000 crore. Several stocks in the bottom cohort are down roughly between 30% and over 50% from their IPO levels. Glottis shares were down 52.78% from their IPO price of ₹129. Gem Aromatics fell 48.34%, and VMS TMT dropped 46.25%.The IPO size of six out of the top-performing Dalal Street starters in 2025 have been over ₹1,000 crore. For instance, Meesho, which floated a ₹5,421 crore IPO, is over 78% above its issue price. Brokerage Groww's parent Billionbrains Garage Ventures, the ₹6,632 crore IPO of which was a success, is trading 65% above its issue price. Shares of companies that floated the largest IPOs have held on to gains, though the extent of their performance has been mixed. Among the four biggest issues in 2025, Tata Capital, HDB Financial Services, LG Electronics India and ICICI Prudential Asset Management opened higher on listing day, but their subsequent performance diverged. While LG and ICICI Prudential witnessed relatively stronger listings and continued to advance, HDB's gains were capped at around 2% after opening nearly 14% on debut."The market is beginning to differentiate between quality and hype," said Ganesh Jagdishen, chief executive of Plutus Global, a Mumbai-based investment banking and M&A advisory. Chandrasekhar of Transcendum said the disconnect between listing gains and sustained performance suggests market pricing is often driven by sentiment rather than fundamentals. 126222206 Leading the gainers is Stallion India Fluorochemicals, which has surged 146.28% from its IPO price, followed by Aditya Infotech (122.71%). Ather Energy has climbed 121.14%, while Belrise Industries is up 99.33%.Other strong performers include Meesho (78.29%), Jain Resource Recycling (77.67%), Quality Power Electrical Equipments (74.72%), Prostarm Info Systems (69.05%), Billionbrains Garage Ventures (65.40%) and Anlon Healthcare (59.34%).Chandrasekhar recommends that investors adopt a wait-and-watch approach rather than rushing into new listings. They "must track post-listing performance before taking exposure, especially when growth capital is limited," he said. In 2026, the challenge will be to identify the right IPOs for investing."Retail investors should learn to look beyond glamorous listing gains and focus on business fundamentals, especially in a rising interest rate environment where growth capital becomes expensive," Jagdishen said.