Are QIBs emerging as the new messiah of India's primary market?

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Qualified Institutional Buyers (QIBs) are quietly emerging as a powerful force in India's primary market, stepping in as last-minute rescuers for large public offerings that struggle to attract retail and non-institutional demand.

 

Recent high-profile IPOs, such as WeWork India, Hyundai Motor India, and Bharti Hexacom, have followed a similar pattern. During most of their subscription periods, these offerings saw muted investor participation, only to experience a sharp revival on the final day as institutional investors rushed in.  

 

QIBs, analysts suggest, have become the saviours of large offerings, especially when companies see weak demand among retail investors.

 

According to Ambareesh Baliga, an independent market analyst, merchant bankers, typically, open an IPO for public subscription only when they have a clear commitment from QIBs.

 

"Otherwise, they may hold back, even if they have clearance from the capital market regulator, as they have the option to delay or cancel the offering," he said.

 

Merchant bankers, Baliga added, usually secure commitments of 1.5 to 2 times the subscription to ensure that even if some QIBs pull out, the issue can still go through.

 

"They are—and often have been—the saviours for such large offerings," he said.

QIBs: The IPO anchors

WeWork India's ₹3,000-crore maiden public issue, which closed for subscription on October 7, 2025, scraped through with a total subscription of 1.15 times. The turnaround was largely driven by QIBs, whose category was subscribed 1.79 times. In comparison, the non-institutional investor (NII) and retail categories lagged behind, with subscription levels of 23 per cent and 61 per cent, respectively.

 

A similar situation unfolded earlier in 2024 with Hyundai Motor India, which launched the country’s largest-ever IPO worth ₹27,870 crore. The issue was fully subscribed only on the final day, again thanks to strong institutional participation. The QIB portion was subscribed 6.97 times, while the NII and retail categories were subscribed 60 per cent and 50 per cent, respectively.

 

Likewise, Bharti Hexacom's ₹4,275-crore maiden offering in April 2024 — also an entirely offer-for-sale issue — saw a comparable pattern. Although the issue was fully subscribed by the second day, QIB demand surged on the final day, propelling the overall subscription to 29.88 times. Within this, QIBs oversubscribed their reserved category by an impressive 48.57 times, while NIIs and retail investors booked their portions 10.52 times and 2.83 times, respectively.

 

All three IPOs were structured entirely as offers for sale, meaning the proceeds benefitted existing shareholders rather than the companies themselves.

 

It is important to note that under regulations of securities and exchange board of India (Sebi), if an IPO fails to achieve at least 90 per cent subscription, the issue is typically required to be cancelled, and the company would need to refund the entire subscription amount to investors. However, there could be certain exceptions or discretion exercised depending on the circumstances, particularly in cases involving partial subscription or specific types of issues.

 

G Chokkalingam, founder and head of research at Equinomics Research, believes QIBs step in when there is no valuation comfort in an IPO.

 

"In cases where retail investors or other segments are uncomfortable with the valuation, QIBs end up being the saviours," Chokkalingam explained.

 

From a valuation perspective, WeWork India’s public issue, priced at the upper band of ₹648 per share, valued the company at around 4.4 times its FY25 price-to-sales and implied a post-issue market capitalisation of ₹8,684.7 crore. Further, at the top end of the price band of ₹1,960, Hyundai Motor India was valued at 26.2 times its FY24 earnings and 26.7 times its annualised FY25 earnings — a level that most analysts described as fully priced, leaving limited room for immediate upside.

 

Bharti Hexacom, meanwhile, was valued at a price-to-earnings multiple of 51.9x for FY23 and an annualised P/E of 75.8x for FY24 — broadly in line with listed peers.

How these IPOs performed on listing?

Hyundai Motor India made a subdued debut, listing at ₹1,934 per share — a 1.32 per cent discount to its issue price of ₹1,960. However, the stock has since recovered, last trading at ₹2,516, up nearly 30 per cent from its listing price and 28.4 per cent above its issue price.

 

Bharti Hexacom, on the other hand, delivered strong gains for investors at listing. Its shares debuted at ₹755, a premium of 32 per cent over its final IPO price of ₹570. The stock has continued to rally, last seen trading at ₹1,740, marking a gain of over 205 per cent from its issue price and nearly 130 per cent from the listing price.

 

Meanwhile, shares of WeWork India are slated to make their D-Street debut on Friday, October 10, 2025.

 

Amidst this, analysts advise retail investors to always aim for their 'valuation comfort zone' when investing in public offerings.