In a hyped-up IPO market, what is the best way to play the game in 2025?

Long-term investors should only invest in an IPO when the company's fundamentals are strong and valuations reasonable

 

Altogether companies raised Rs 1.7 trillion through initial public offerings (IPOs) in 2024.  Fund mobilisation through this route is expected to rise and breach the Rs 2 trillion mark in 2025, according to estimates by investment banking firm Pantomath Group. Investors planning to go for IPOs in 2025 should be cognisant of both the risks and the opportunities.

 

Key risks

 

Amid the bullish market conditions of 2024, many IPOs received an overwhelming response. This had consequences for retail investors. “It often led to IPOs coming at inflated valuations,” says Yash Sedani, assistant vice president, investment strategy, 1 Finance.

 

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