Indian IPOs (initial public offers) have become the market’s favourite magic trick: The buyer walks in thinking they’re funding growth, not realising they mostly funded an exit.
Chief Economic Adviser V Anantha Nageswaran has openly criticised the growing use of IPOs as exit routes rather than fund-raising tools, warning that this trend “undermines the spirit of public markets”. The numbers suggest that this warning deserves attention.
Since 2021, about ₹5.4 lakh crore (including over ₹1.5 lakh crore in 2025 so far) has been raised in over 340 mainboard IPOs, but roughly two-thirds of that came via offers for sale (OFS), not fresh capital. In other words, a big chunk of “fund raising” was actually “funds changing hands”.
Retail, meanwhile, has turned IPOs into a three-day sport. Scan the grey-market chatter, wait for day-three subscription cues, apply for one lot “just in case” costing about ₹14,000-15,000, and if allotment arrives, sell at the opening tick around 10 am. It’s not investing; it’s queue management with a demat account. Fundamentals come later, if at all.
As Warren Buffett once put it, “An IPO is like a negotiated transaction – the seller chooses when to come public – and it’s unlikely to be a time that’s favourable to you.” Yet, the queue keeps getting longer, with an estimated over ₹2-lakh-crore IPO pipeline for CY26 as NSE, Reliance Jio and Manipal Hospitals could come knocking the door.
In just five years (CY21-25), IPOs have raised more money than they have done in the previous three decades! India has seen IPO fever before. In the mid-1990s, the post-1991 liberalisation boom unleashed hundreds, even thousands, of issues a year, with valuations often sprinting ahead of scrutiny. A few durable winners emerged, but many listings later slid into penny stock obscurity. Today’s process is cleaner, but the urge to mistake frenzy for quality remains.
The current scoreboard is not flattering. Across 344 IPOs since 2021 (as on December 8, 2025), about 26 per cent couldn’t even close listing day above issue price. Roughly 44 per cent are below issue price today. For 2025, it’s basically a coin toss: 50 per cent of IPOs are already below issue.
Buffett’s other warning fits uncomfortably well: “You don’t want to get into a stupid game just because it’s available.” Because sellers choose the timing, hype does the marketing and buyers supply the liquidity.
In this article, we dissect five years of IPO data including OFS versus fresh, subscription frenzy, listing-day pops, post-listing slide and the winners and wipe-outs from issue price.
If the last five years have taught retail investors anything, it is this: In India, the IPO is not one product. It is two. The first is the public-market listing of a business. The second is a short-duration trade dressed up as a national festival, and this part is gaining precedence.
The problem is not the retail or HNI punts. The problem is that the system innocuously has started rewarding punting more consistently than it rewards holding. That is not an ideological complaint. It is simply where the numbers land. Let’s start with what an IPO is supposed to do: Raise money for the company.
Now look at what it has mostly done since 2021 (see Table 1). Across CY21 to CY25 till December 8, total IPO mobilisation is about ₹5.41 lakh crore. Of this, only about ₹2.03 lakh crore came as fresh issue. Roughly ₹3.38 lakh crore, or about 62.5 per cent, was OFS. Put differently, for every ₹100 raised, about ₹63 went to existing shareholders (promoters, VC funds, early investors) and about ₹37 went into the company. That’s not inherently evil. An OFS offers benefits. But for retail investors it changes what the IPO really is. When the bulk of the issue is an exit, pricing logic subtly shifts from “how much capital the business needs” to “how much the market will swallow today.” Now combine that with a market that has been running hot since the March 2020 lows, and you get a cycle where sellers show up when demand is easiest to monetise; buyers show up because the last few buyers made money.
Notwithstanding the impressive demat account additions, retail participation in public issues has gradually become a behavioural template.
It’s as if somebody has whispered into their ears: “You do not need to be a fundamental investor. You need a demat account, a few friends on WhatsApp and the ability to pretend you are “long term” for one week, until the stock lists.”
The typical process is familiar: Apply in the minimum lot per account (or more if IPO funding is handy), watch subscription numbers, pick the last day when the “quality” (read QIB) money has shown up and hope the listing day opens green. If you get allotment, sell at the open. If you do not, complain about allotment.
If the stock lists red, tweet about “operator games”. What makes this template so popular is that, for much of the period, it worked often enough to feel like a strategy (seven out of ten chance).
Listing gains exist, but the juice is thinning (see chart 1). On the “punting” metric — selling at listing-day open no matter what, the average gains look attractive in most years. In 2021, average listing-open gain was about 31 per cent. In 2023 and 2024, it was still high at 27-29 per cent. In 2022, it cooled to about 10 per cent.
Then 2025 arrives and the average listing-open gain drops to about 9 per cent (till December 8), with a worst opener at -39 per cent.
That is market’s way of saying: The same game is available, but expected “free lunch” has been reduced, and the rare bad outcome is now large enough to hurt.
Given the craze and nature of IPO allotment, no one can get a piece of all the IPOs in a year. Still, the average tells you how the gravy train is slowing down. If you look at the average of these one-day payoffs with a full-year market return, you will see that in 2025 simply investing in a Sensex index fund or ETF would have been more hassle-free and equally rewarding!
The distribution of listing-day gains (based on listing-day close, in percentage share of IPOs each year) makes the point sharper.
In 2021, 22 per cent of IPOs delivered a listing gain of more than 50 per cent (examples include Sigachi Industries, Indigo Paints). That number slipped to 19 per cent in 2024. In 2025, it collapsed to just 4 per cent with the likes of Quadrant Future Trek and Urban Co. holding that fort. In 2025, the “meh or worse” zone dominates: About four in five IPOs either rose no more than 25 per cent or actually listed in the red. So, the party did not stop. It simply stopped serving free shots.
The first slap: Across 2021-2025, one in four (about 26 per cent) can’t even close green on day one. Even for punters, the market does not guarantee a pop.
In 2025, it worsened to about 32 per cent — roughly one in three issues could not even hold the offer price till the closing bell. Examples of popular names include Ather Energy, JSW Cement and Orkla India. This matters because the popular narrative often assumes that “the worst case is a smaller listing gain”. The data says the worst case is listing pain!
The second slap: If you didn’t sell on day one, odds turn against you. Now comes the core point. If listing day is the sugar rush, what happens after? Look at CMP (current market price) versus listing-day close data.
For 2024, about 64 per cent of IPOs are below their listing-day close. For 2025, about 68 per cent are below. So, two-thirds of the recent cohorts are worse off than the person who sold at day-end.
The “hold for long term” decision looks like it is being punished systematically, as IPO enthusiasm fades fast. This is not because all those companies are bad.
It is more because listing-day close, especially in frothy cycles, can be a price inflated by constrained supply, momentum buying and post-allotment euphoria.
If you want to capture the retail experience in one statistic, it is this: Among IPOs that listed with a gain, how many later fell below the listing-day close?
In 2025, about 68 per cent of IPOs had some sort of a listing gain. But among those “successful” listings, two out of every three later fell below listing-day close. This list includes HDB Financial, LG Electronics, Pine Labs, Physicswallah. That translates to roughly 49 per cent of all 2025 IPOs doing the classic “pop then punish” routine.
In 2024, the same pattern had appeared at scale: Close to 47 per cent of all IPOs popped on debut and later slipped below that listing-day close. So ,discipline pays, but it is just not the kind of discipline you learn in investor-awareness brochures. The discipline that pays, increasingly, is to sell on day one!
Also, buy-and-hold from issue price is drifting to a coin toss. From issue price to CMP (as of December 8, 2025), the cohorts show a clear deterioration in hit rate. Across 344 IPOs since 2021, about 44 per cent are trading below issue price (see chart 2).
For 2021, more than two-thirds of IPOs were above issue price. In 2024 and 2025, it is almost a coin flip — 50:50. This is where retail can get trapped by the headline story of a bull market. “Markets are up, so IPOs should do well.” Not necessarily. IPO pricing is not a passive mirror of the index. It is an active negotiation with optimism baked in. When optimism peaks, the pricing leaves less margin for error.
Now the most damaging stat for IPO-FOMO: The probability that an IPO stock trades below its issue price within two years (see chart 3). For the 2024 and 2025 cohorts, roughly 75 per cent have already hit an “all-time low” below issue price within two years (with 2025 still young). For 2023, it was about 67 per cent.
In plain English: If you skipped the IPO, odds were high you got a chance to buy the same stock cheaper later. Not in a minor way either.
The average fall from issue price to that post-listing low ranges from -21 per cent (2025 so far) to -49 per cent (2021 cohort), with 2023 and 2024 sitting around -37 per cent and -29 per cent. For instance, Eternal (Zomato) after its July-2021 IPO fell over 45 per cent to its all-time low in the next 12 months. Similarly, PB Fintech’s all-time low (over 60 per cent cheaper than issue price) was hit in around a year’s time after its IPO.
This tells you probably why retail’s obsession with “allotment” looks misplaced. You are fighting for access to an offer price that, in most cases, does not remain a privileged entry point in near future.
Subscription numbers have become a proxy for truth. A 100x issue must be “good”. A 2x issue must be “bad”. This is retail’s version of due diligence: Outsource thinking to a queue. Among the most oversubscribed IPOs (201x- 326x), listing gains were often spectacular. But about one-third of these “most wanted” IPOs (see table 2) are below issue price today. So, oversubscription is reliable at predicting excitement and day-one pop. It is much weaker at predicting whether the stock holds value. Clearly, subscription multiples measure how many people wanted the same lottery ticket. They do not measure business quality.
The new-age cohort makes the broader patterns more visible, because the narratives are louder and the numbers are sharper. New-age IPOs weren’t from one “tech” bucket. They spanned SaaS, edtech, payments and fintech, insurtech, investech, consumer internet and commerce, platform marketplaces, mobility and logistics, travel, food delivery and quick commerce, co-working and even EV OEMs.
Across 28 new-age IPOs between 2021 and 2025 (till December 8), the combined market-cap is up by about ₹2.63 lakh crore versus implied IPO-time market-cap. But that factoid is skewed heavily by a few outliers. It is not a uniform story of value creation. In fact, it is a story of dispersion: A few created a lot (Eternal, PB Fintech) and several destroyed (One 97, Ola).
A meaningful slice of this cohort was loss-making at IPO. There were 13 comparable loss-making firms out of the 28 new-age businesses. As of FY25, over 50 per cent of them are still loss-making. Examples include Ather Energy, Swiggy, Ola and One 97. Yet valuations at IPO were still demanding where profits existed, with P/E multiples in the hundreds in some cases (Nykaa/FSN, Lenskart, Capillary). Profitability in a few years was a common analyst promise at IPO time; for many companies, that crystal ball proved unreliable.
What retail should take from this is not “avoid all new-age”. It is “avoid the storytelling trap”. When profits are optional, the price you pay becomes the entire story.
Even subscription behaviour in this bucket looks divided. Some heavily-discussed brands were barely subscribed. Others saw massive oversubscription. Neither extreme reliably predicts post-listing outcomes.
The IPO market survives on the right tail. For every investor who remembers the -50 per cent drawdown, another remembers a +250 per cent winner and decides they deserve one too. The winners between 2021 and 2025 are extraordinary: Some issues (Kalyan Jewellers, IRFC, IREDA, Prudent Corporate Advisory, Bharti Hexacom) have delivered multi-hundred per cent returns from issue price.
But if you look at the five years, the losers are not mild disappointments either. They include deep drawdowns (AGS Transact, Dreamfolks, Fusion Microfinance, ESAF SFB, Ola Electric), even in fairly recent issues (Gem Aromatics, Glottis, VMS TMT).
The honest description is fat tails. That is why IPOs attract lottery behaviour. But fat tails also mean the left tail is capable of permanent capital damage —i.e. the kind you do not recover from by “holding for long term”.
If India sees another packed IPO pipeline in 2026, retail enthusiasm will not fade. It never does.
But if the last five years teach anything, the smarter retail investor will stop treating “allotment” as the win. The win is paying a price that still leaves room for reality. And reality, as always, turns up after the hype.
At bl.portfolio, IPO calls are driven by fundamentals and valuation comfort, not listing-day excitement.
Published on December 13, 2025
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