2025 IPO lessons: What retail investors learnt and how to spot 2026 winners

Key takeaways from 2025 IPOs and how retail investors can spot opportunities in 2026

India’s IPO market gave mixed results to retail investors in 2025, offering some good lessons in valuation discipline, sectoral resilience, and post-listing strategy. While some companies delivered strong listing gains, others faltered, highlighting that hype and oversubscription alone cannot guarantee profits.

Lessons from 2025’s IPO listings  

Selectivity over chasing hype: “Don’t chase every IPO. With nearly 60 per cent of listings offering little or no gains, retail investors need to research companies and subscribe only if they have conviction,” says Aditya Agarwal, co-founder of Wealthy.in, a wealth management platform.

 

He points to Lenskart, which sought a 10x valuation jump and listed at a 535x earnings multiple, as a stark reminder that unicorn status does not automatically translate into listing-day profits. Earlier examples like Paytm, Nykaa, and Mamaearth offered similar lessons.

 

 

Valuation and fundamentals are crucial: Kresha Gupta, chartered accountant, director and fund manager at Steptrade Capital, notes that of 96 mainboard IPOs in 2025, 49 listed positively, while 47 ended in losses. “Consistent returns come from understanding the business, comparing valuations to peers, and assessing promoter intent and use of proceeds,” she adds. She also emphasises the importance of evaluating whether proceeds are directed towards company expansion rather than promoter exits.

 

Grey-market premiums (GMP) and oversubscription are unreliable indicators: Agarwal cites Urban Company, 103x subscribed yet only meeting the upper end of listing expectations. “Retail frenzy often led investors to perceive IPOs as quick-profit plays rather than long-term investments,” he explains. Gupta echoes this, noting that even among the most-subscribed IPOs, many traded below issue price shortly after listing.

 

Post-listing strategy matters: Investors who have a clear post-listing plan fared better. “If a stock appears overvalued after listing, taking partial profits is wise. Conversely, quality companies can be accumulated after a muted debut,” Agarwal advises. Ather Energy exemplifies this approach, rewarding long-term investors with more than 100 per cent gains from its IPO price. 

 

Sectoral trends and resilience

Fintech and digital platforms: These emerged as clear winners, with companies like Groww, PhysicsWallah, and NSDL showing resilience due to strong fundamentals and growth narratives.

 

“Fintech IPOs held or increased post-listing gains because structural tailwinds and solid business models underpinned their valuations,” says Agarwal.

 

Electric vehicles and green energy: EV players such as Ather Energy and Belrise benefited from government support and rising demand. Mayank Jain, market analyst at Share.Market, says, “EV-linked names doubled post-listing due to supportive policies, structural demand, and proven business models.”

 

Manufacturing, industrials, and healthcare: Companies with predictable cash flows, asset-light models, and regulated pricing environments demonstrated stability. Examples include Hyundai Motor India, LG Electronics India, and hospital chains. Gupta adds, “Sectors with non-cyclical demand showed resilience, whereas heavily cyclical businesses struggled amid margin pressures.”

 

Investor behaviour: Retail participation reached record levels, driven by easy UPI-based applications and social media hype. HNIs influenced pricing initially but pulled back mid-year amid market volatility, affecting IPO performance. Gupta observes that SME IPOs often outperformed larger mainboard issues in subscription multiples, reflecting retail appetite for smaller, fundamentally sound firms.

Big winners of 2025

Shivani Nyati, head of wealth at Swastika Investmart, highlights standout performers: “LG Electronics India listed at a 50 per cent premium, Meesho gained ~46 per cent, Highway Infrastructure returned 64 per cent, and Urban Company delivered ~57 per cent gains. These listings proved that pricing discipline and profitability visibility matter more than brand hype.”  Nyati also points to underperformers: “WeWork India opened ~7 per cent below issue price, Orkla India slipped 15 per cent, and Clear Secured Services fell 22 per cent, showing that OFS-heavy or commoditized businesses can punish investors.”

 

Lessons for 2026

With an expected $20-billion IPO pipeline, experts urge caution.

 

“Key warning signs include aggressive valuations, large promoter exits, inconsistent financials, regulatory risks, and dependence on cyclical sectors,” said Narendra Solanki, head of fundamental research, Investment Services, Anand Rathi Share.

 

Gupta, meanwhile, adds that inflated GMPs and weak fundamentals remain risky, while high OFS components may indicate promoters exiting rather than funding growth.

 

Strategy for 2026

 

Retail investors should maintain valuation discipline, limit IPO exposure to 5-10 per cent of portfolios, and prioritise companies with clear use of proceeds and promoter alignment, said Swapnil Aggarwal, director, VSRK Capital. Agarwal added, “Early themes likely to dominate include telecom, fintech, financial services, and hospitality”.

 

Jain predicts the market may remain bullish if domestic flows are strong and institutions continue selective buying.

 

“Mid- and small-cap IPOs offer attractive opportunities if investors focus on quality companies with clean balance sheets and visible earnings growth,” he adds.    “Looking ahead, 2026 may be the year of mega-caps. Key upcoming IPOs include Reliance Jio, NSE, Flipkart/PhonePe, and SBI Mutual Fund. Retail investors should maintain valuation discipline, allocate only ~10 per cent of their equity portfolio to IPOs, and prioritise companies with clean governance and visible earnings,” Niyati advises.