Primary market performance: 80 IPOs raise $14 billion this year till now; Kotak Equities report says investors growing ‘selective’

The Indian primary market has raised $14 billion through IPOs in CYTD25, down from $19 billion in 2024, Kotak Institutional Equities said in a report.So far, 80 companies have listed this year, compared with 91 in 2024, while offer-for-sale (OFS) deals accounted for $5.2 billion and fresh capital raises totalled $8.5 billion of the roughly $10 billion in primary issuances this year. The IPO pipeline remains robust, with more than 200 companies expected to raise around $35 billion, the report added.

Kotak Institutional Equities highlighted that the subdued performance of recent IPOs may influence investment decisions for upcoming issuances.“Institutional investors appear increasingly selective, favouring issuers with strong fundamentals and reasonable valuations. Retail investors may also turn more cautious given recent underperformance and limited listing gains,” the report noted.Only 15% of companies in CYTD25 delivered more than 25% returns at listing, compared with 41% in 2024. Over 2021-25, 38% of companies are trading below their issue price, Kotak noted, highlighting that early enthusiasm does not always translate into sustained gains. Large- and mid-sized IPOs have fared better than smaller issues, reflecting a growing emphasis on valuation and fundamentals.

Listing day highs, long-term lows

The report also noted a widening gap between initial investor enthusiasm and post-listing performance. Even highly subscribed IPOs have struggled to maintain gains over the medium term. Companies that posted strong listing-day returns often failed to sustain momentum, underlining the importance of selective investment strategies, Kotak said.

Pipeline dominated by smaller issuances

Most of the IPO pipeline consists of smaller deals, with offerings under Rs 10 billion accounting for 67% of IPOs but only 38% of total value, Kotak Institutional Equities observed. Mid-sized deals between Rs 10–25 billion comprise 18% of both issuances and value, while large issuances above Rs 50 billion make up 4.3% of deals but 24% of the total value.