Amid ₹1.85-trn fund raise, here are 5 lessons from IPO investing in 2025

The year 2025 has seen over 100 mainboard, and 250+ SME IPOs. From frenzied demand to aggressive pricing among others, here are the key learnings from IPO investing as per experts.

India's primary market is set to close calendar year 2025 (CY25) on a strong note, marking one of the most active and record-breaking years for IPOs. According to data from PRIME Database, a total of 101 mainboard IPOs and 254 SME IPOs collectively raised ₹1.85 trillion as of December 15, the highest-ever annual fund mobilisation via public issues.  Of the total amount raised, mainboard IPOs accounted for ₹1.74 trillion, while SME IPOs raised ₹10,853.89 crore. This compares with ₹1.6 trillion raised in CY24, underscoring the sustained momentum in India’s IPO market for the second consecutive year.  The bumper fundraising was driven by several marquee offerings, including Tata Capital, LG Electronics India, HDB Financial Services, ICICI Prudential AMC, Lenskart Solutions, Groww, NSDL, Pine Labs, Meesho, PhysicsWallah, and Canara HSBC Life Insurance, among others.  Describing 2025 as a "landmark year" for India's primary market, Pranav Haldea, Managing Director, PRIME Database Group, said India Inc has raised record IPO funds for two consecutive years—reflecting the market's growing depth and maturity.  Analysts noted that crossing the 100 mainboard IPO milestone highlights a structural transformation in India's IPO ecosystem, making it more resilient, diversified, and less vulnerable to global volatility. However, a closer analysis of subscription trends, listing-day performance, and post-listing returns reveals several important lessons for IPO investors. 

1) Oversubscription does not guarantee listing gains

  CY25 clearly demonstrated that heavy oversubscription—especially in the retail category—does not ensure listing-day profits or sustained returns. Of the 101 mainboard IPOs, as many as 29 IPOs (28.7 per cent) listed at a discount to their issue price.  These included well-known names such as JSW Cement, Dr Agarwal’s Healthcare, Ather Energy, WeWork India, Orkla India, and Fujiyama Power Systems, despite subscriptions ranging from 1x to 49x.  Notably, seven IPOs subscribed over 100 times in 2025, but six of them have either partially or fully eroded their listing gains. Similarly, 11 of the 19 IPOs subscribed between 50x and 100x saw muted or negative post-listing performance.  ALSO READ | Hungry IPOs carve out a bigger hefty slice of mutual fund liquidity  In the SME segment, 85 out of 238 listings delivered listing-day losses of up to 45 per cent, highlighting elevated risk in overheated segments.  "While nearly two-thirds of IPOs listed positively, only about half continue to trade above their issue price today, reinforcing that post-listing outcomes remain market-driven," said Vikas Khattar, MD and Co-head of Investment Banking at Ambit Private Ltd. 

2) Aggressive IPO pricing increases downside risk

  Analysts pointed out that aggressively priced IPOs struggled the most on debut. Arisinfra Solutions, for instance, plunged over 21 per cent on listing day, as lofty valuations left little margin for investors.  The IPO was priced at a TTM P/E of 210.9x, compared with 32.5x for peer Shankara Building Products, while its EV/Ebitda stood at 48.3x versus 15x for the peer—making the valuation difficult to sustain.  Other IPOs such as Ajax Engineering, Ather Energy, Om Freight Forwarders, Glottis, and Fujiyama Power also witnessed listing-day declines of up to 35 per cent, primarily due to valuation concerns. 

3) Scrutinise ‘Object of the Issue’: OFS vs fresh issue

  CY25 saw a sharp rise in Offer for Sale (OFS)-heavy IPOs, with over 60 per cent of total IPO proceeds coming from shareholder exits rather than fresh capital infusion.  Companies such as LG Electronics India, ICICI Prudential AMC, Groww, Lenskart, NSDL, HDB Financial Services, WeWork India, Canara HSBC Life Insurance, and Urban Company had large or exclusive OFS components.  ALSO READ | Anchor lock-in expiry to unlock $24 billion worth shares by March 2026     Prashanth Tapse, Senior VP (Research) at Mehta Equities, advised retail investors to be cautious with such IPOs and track post-listing performance before taking exposure, especially when growth capital is limited. 

4) Fundamentals mattered more than hype

  One of the clearest shifts in 2025 was investors’ greater focus on profitability, governance, and business clarity rather than speculative narratives.  For example, LG Electronics India and Rubicon Research—subscribed 38x and 60.38x, respectively—delivered strong post-listing performance. As of December 10, LG Electronics India was up over 37 per cent, while Rubicon Research had gained nearly 31 per cent from their issue prices.  "There was a clear shift from quantity to quality in IPO investing this year, with investors prioritising scalable, profitable businesses over hype-driven stories," said Vaqarjaved Khan, Senior Fundamental Analyst at Angel One. 

5) Grey market premiums failed as reliable indicators

  CY25 reinforced that grey market premiums (GMPs) and headline subscription numbers are poor predictors of long-term returns.  Several IPOs with strong GMPs and initial pops—such as Lenskart Solutions, Studds Accessories, Aequs, Vidya Wires, Orkla India, and Jinkushal Industries—failed to sustain their valuations post listing.  "Sentiment-driven indicators like GMPs often mislead investors. Disciplined fundamental analysis remains essential," said Tapse of Mehta Equities. 

Listing-day strategy: exit or stay invested?

  Haldea of PRIME Database added: Especially with average listing gains declining in 2025, retail investors putting money in IPOs for listing gains are advised to exit the stock on the listing day itself, even if it lists at a discount, since they have not done any analysis on the company as a long term investment.    “On the other hand, they may stay invested in fundamentally strong companies with compelling valuations, and even add to their positions, even if such companies list at a discount,” he added.