Pre-IPO deals moderate after peaking in 2023 amid buoyant primary markets

Narrowing valuation gap between pre-IPO and issue prices seen as key factor

Pre-initial public offering (IPO) allotments have fallen out of favour over the past two years amidst buoyant primary markets and increasing average float sizes.

 

In 2023, 13 firms raised a record ₹1,074 crore through pre-IPO placements. However, this figure dropped to eight firms raising ₹387 crore in 2024. Meanwhile, so far this year, seven firms have raised ₹506 crore.

 

The decline in both the number and value of these deals over the past years is largely attributed to the narrowing valuation gap between pre-IPO and IPO prices.

 

“Earlier, the pre-IPO price was lower than the IPO price, creating a price