New wave of IPOs is coming. Is Dalal Street ready?

India Today

30-04-2025

After a quiet start to the year, the initial public offering (IPO) market in India appears to be waking up again. In the first four months of 2025, only nine companies managed to list on the mainboard, with Ather Energy becoming the 10th. This is much lower than the same period in 2024, when 25 companies had already listed.The IPO market, which saw strong activity last year, started 2025 on a slower note. Raghvendra Nath, Managing Director of Ladderup Wealth, said that 2024 was a record year.He further added that IPOs had been oversubscribed nearly 27 times on average, drawing total bids worth Rs 46.7 trillion against an offer size of Rs 1.8 trillion. The SME segment also saw massive interest, with 236 IPOs and an average oversubscription of 165 times.SIGNS OF A COMEBACKIPOs seem to be making a comeback. Ather Energy's IPO is currently open for bidding. Several other companies such as Prestige Hospitality Ventures, Canara HSBC Life Insurance Company, and Urban Company have filed their draft papers with Sebi. Reports also suggest that InCred is preparing for an IPO.In addition to these, some big names are lining up to go public in 2025. Reliance Jio Infocomm is expected to launch a public issue worth Rs 40,000 crore, which could become the biggest IPO in Indian history if it goes through.Tata Capital, PhonePe, and Zepto are also said to be in the pipeline. Financial firms like HDB Financial Services and Hero FinCorp are planning to raise Rs 12,500 crore and Rs 3,668 crore, respectively. LG Electronics India, which already has Sebi's nod, is preparing for a Rs 15,000 crore offer for sale.WHY THE SUDDEN ACTIVITY?Trivesh, Chief Operating Officer at Tradejini, said the IPO buzz is back on Dalal Street after a short pause. Many companies are now moving ahead with their IPO plans.He pointed out that the rise in filings and new listings, including both mainboard and SME IPOs, shows that market sentiment is improving and investor interest is growing again.'In 2024, India raised a record-breaking USD 20.5 billion through IPOs, making it the second busiest IPO market in the world,' Trivesh said.He explained that companies are taking advantage of strong liquidity, steady foreign inflows, and positive market momentum. The stable economic outlook and investor confidence are helping firms raise money at good valuations. Many of these companies had delayed their IPO plans earlier, waiting for better conditions. Now that the market has improved, they see this as the right time to go public.Trivesh also added that India's fast economic growth, strong investment in infrastructure, a boost in manufacturing, and steady consumer spending have made the country attractive for raising capital. As a result, more companies are rushing to tap into this positive environment.SHOULD INVESTORS JUMP IN?While the IPO market is looking busy again, experts suggest investors should not jump in without doing their homework.Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said, 'Recent market volatility and investor caution slowed down IPO activity in the last two months. But going forward, the market will be selective. Investors will look closely at valuations and management quality.'Bathini pointed out that although there was strong listing interest in the past, many IPOs have not performed well in the long run.'In the past three years, around 700 IPOs were launched. Most of them have underperformed after listing gains. So investors are now more careful in choosing IPOs,' he said.Trivesh shared the same view, mentioning that in 2025 so far, there have been 10 mainboard IPOs. Out of these, six gave profits on listing, three did not, and one is yet to list. In the SME space, 61 IPOs have been launched this year, with nearly half giving gains on the first day. This shows that while there is room for profits, there are also risks.'Investors should not be carried away by hype. It is important to study the company's business model, how it earns money, what price it is asking, and what future growth it has,' Trivesh said.advertisement(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)