IPO market in 2026: After a record-breaking 2025, India’s primary market is showing visible signs of fatigue in early 2026, with fewer public issues hitting the market and subscription levels moderating sharply.
2025 marked a defining phase for India’s primary markets, with 373 IPOs, comprising 103 mainboard and 270 SME issues, raising around ₹1.95 trillion, highlighting both the scale and breadth of capital formation during the year.
Only 5 IPOs in 2026 so far
However, the momentum has slowed significantly in the last few weeks. So far in 2026, only five mainboard IPOs have opened for public subscription, with four more likely in the coming week.
Notably, the investor appetite also appears to have weakened.
Aye Finance was subscribed just 0.97 times, indicating weak demand.
Fractal Analytics, which saw 2.66 times subscription, delivered a subdued market debut.
Shadowfax Technologies, subscribed 2.72 times, listed at a discount to its issue price.
Bharat Coking Coal was the only outlier, attracting an overwhelming 147 times subscription and emerging as the only issue with exceptionally strong demand. Meanwhile,
Amagi Media Labs, despite being subscribed around 30 times, witnessed a relatively muted listing performance. This indicates that the broader pattern points to cooling enthusiasm.
In contrast, around 43 issues in 2025, including Corona Remedies, Meesho, Sudeep Pharma and Indo Farm Equipment, had seen subscription levels exceeding 50 times, underscoring the peak of investor exuberance at the time.
A cyclical shift underway
According to market analysts this moderation is part of a broader market cycle.
“The decline in investor interest in mainboard IPOs is not surprising; in fact, it was expected,” said G Chokkalingam, founder and head of research at Equinomics Research.
He said IPO cycles historically follow a pattern, strong rallies in the secondary market are typically followed by a surge in primary market activity. As secondary market enthusiasm builds, companies rush to tap liquidity. However, the primary market eventually absorbs significant liquidity, which then reduces liquidity in the secondary market, particularly in small and midcap stocks, leading to corrections in those segments.
From the September 2024 peak, when total market capitalisation touched ₹5.7 trillion, the broader market has yet to reclaim those levels. Small caps alone have seen a sharp decline in market capitalisation from their peak, while mid-caps have also witnessed substantial erosion.
Nearly 50 per cent of small-cap stocks (with market cap between ₹2000 crore and ₹34,700 crore) are currently trading 40 per cent below their all-time-high levels, as per a recent study by Abakkus Mutual Fund.
“IPO momentum is not driven by Sensex or Nifty; it is largely influenced by the performance of small- and mid-cap stocks, as nearly 90 per cent of IPO issuances by number come from these segments,” Chokkalingam said.
IPOs above ₹5000 crore accounted for 8-14 per cent
"Issues above ₹5,000 crore accounted for only 8-14 per cent of total IPO volumes, ensuring market activity was not overly dependent on episodic mega listings," showed a report by Pantomath Capital in December 2025.
Chokkalingam added that many small and midcap stocks are now down 30-60 per cent from their September 2024 peak, making listed secondary market opportunities relatively more attractive. On February 17, the Nifty Midcap 100 index settled at 59,881.70, down nearly 3 per cent from its all time high of 61,548.85 touched on January 7, 2026. The Nifty Smallcap 100 settled at 17,146.7, down 13 per cent from all-time high of 19,716.2 touched on December 12, 2024.
Choppy markets weigh on sentiment
Analysts also attribute the slowdown to near-term market conditions and investor experience with recent listings.
“The recent moderation in IPO subscription levels is largely due to volatile market conditions. Over the past few months, markets have been choppy, range-bound, and in a consolidation phase. In such an environment, investor enthusiasm naturally cools,” said Kranthi Bathini, director of equity strategy at WealthMills Securities.
He added that post-listing performance has also influenced sentiment. While several IPOs delivered initial listing gains in 2025, many have failed to generate meaningful medium- to long-term returns, with some trading below their issue prices. This has made investors more selective.
According to Chokkalingam, weakness in the overall stock market is also making investors more cautious about IPOs. When the secondary market doesn't perform well, people are are less willing to take risks in new listings.
“This cycle suggests that the primary market’s strong phase has largely run its course for now, and attention is likely to remain on opportunities in the secondary market,” Chokkalingam said. Disclaimer: The views or investment tips expressed by the analysts/brokerage in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.
 "India's IPO market hits pause in 2026 as investors' risk appetite fades")
