52 of 112 FY26 IPOs below issue price; analysts advise selective buying

FY26 was a revealing year for India’s primary market. Out of 112 mainboard IPOs, 52, or 46 per cent, of those that listed are trading below their issue price as of April-end, according to data analysed by PRIME Database. Sectors like new-age tech, SME-style expansions scaled to mainboard, and asset-light service plays saw the sharpest corrections.

 

Stocks such as Anlon Healthcare, Jaro Institute, VMS TMT, Shree Ram Twistex and Glottis are down in the range of 50 to 80 per cent, as per data shared by PRIME Database. Other counters like Gem Aromatics and those involved in the solar-related business, such as Solarworld Energy Solutions, Oswal Pumps, Vikram Solar, and GK Energy, have corrected more than 50 per cent from their issue prices.

 

 

Big names such as Pine Labs, HDB Financial Services, Physicswallah, JSW Cement, too, have disappointed their investors as these counters have erased all the post-listing gains and are trading well below their IPO levels, data showed. 

 

Analysts said that the headline takeaway is clear - the era of easy listing gains is over. For years, IPO pricing in India leaned heavily in favour of promoters and private equity exits. But FY26 marked a rebalancing, with markets demanding profitability over promise and investors prioritising balance sheets over branding.

 

Sourav Choudhary, managing director at Raghunath Capital, said that this highlights how quickly sentiment can reverse when expectations are not met. Besides, this is not just a temporary blip, but reflects a structural shift in how the market is pricing growth, governance, and profitability.

 

He attributed this underperformance to three factors: aggressive valuations (often priced for perfection); weak earnings visibility, and high dependence on future narratives rather than current cash flows.

 

Echoing similar views, Balaji Rao Mudili, research analyst at Bonanza, said that newly listed stocks are struggling to deliver returns because the story told before IPO quickly moves to valuations and earnings visibility. Investor sentiment has shifted amid highly volatile trends, leading to a much more cautious approach toward valuations.

 

"Even if the stock is fairly valued but the sector is under regulatory pressure, or if there are macro headwinds like a rate hike, rupee depreciating, sectoral growth slowing down, then the stocks which are sensitive to such developments also face the heat," he said.

 

Amid the broad decline, Sourav, however, said that there are pockets of value emerging as well. Not all fallen IPOs are bad businesses, and many are simply mispriced at listing. He said that selective opportunities exist in capital goods & infrastructure, manufacturing-led businesses, and companies with strong order books and operating leverage.

 

"Names like Vikram Solar or Kalpataru could benefit from long-term sector tailwinds despite short-term listing pressure," the analyst said.

 

Meanwhile, data shared by Prime Database at the start of fiscal year 2027 showed that more than 140 companies aim to raise around ₹1.75 trillion. Despite headwinds, FY26 saw a record ₹1.78 trillion fundraise by 112 companies.  =========================== 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.