Will volatility dampen the IPO market in 2025? Here's what experts predict

Data sourced from PrimeDatabase suggests that the IPO pipeline for CY25 continues to remain strong, as 44 companies have already received approval from Sebi

Indian primary markets, which saw 331 new offerings raise a combined Rs 1.68 trillion in 2024, have so far been lackluster in calendar year 2025 (CY25).

 

So far in 2025, 9 mainline companies—including Hexaware Technologies, which made its debut on Dalal Street on Wednesday—have raised an estimated Rs 15,108 crore from the markets. However, their subscription levels have been much lower, often in single digits, influenced by the volatility in the secondary markets.

 

That said, data sourced from PrimeDatabase suggests that the IPO pipeline for CY25 continues to remain strong, as 44 companies have already received approval from the Securities and Exchange Board of India (Sebi) for their IPOs, which are estimated to collectively raise approximately Rs 66,095 crore.

 

 

In addition, 67 other companies have filed their draft papers with Sebi, PrimeDatabase suggests, and are awaiting approval, with the total amount estimated to be raised by these companies pegged at around Rs 1.17 trillion.

 

Market analysts, however, remain divided on the outlook for the primary markets in the months ahead, given the ongoing volatility. The benchmark equity indices, BSE Sensex, have corrected around 11.64 per cent, and Nifty50 has dropped 12.68 per cent from their all-time highs.

 

Independent market analyst Ambareesh Baliga expects the nervousness in the secondary markets to rub-off on the fund raising via the primary markets in the months ahead. Tepid performance of the secondary markets, he said, can see a drop in the demand for fresh paper. Lower subscriptions of the recently closed IPOs, he said, are a testimony to this.

 

“A weak company with weak financials, which earlier would have been easily subscribed to, may not get subscribed now. If any of these IPOs open and are later withdrawn, it will be significantly negative for the IPO pipeline. Whenever this has happened in the past, the number of issues that hit the primary markets have dropped. Also, a weak listing discourages investors, even the long-term ones,” Baliga added.

 

At the bourses, meanwhile, out of the 9 stocks that debuted at the exchanges in CY25, 3 are trading below their listing as well as their issue price, while 6 are trading above their listing price.

 

Though the fortunes of the primary and secondary markets are inter-linked, Mahavir Lunawat, group founder and managing director of Pantomath Financial Services, believes that the ongoing volatility will not impact the IPO markets much. Once the dust settles in the secondary markets, he believes primary market activity, too, will gather steam.

 

Lunawat expects companies to raise around Rs 2 lakh crore from public offerings this year alone and further expects around 1,000 companies to go public in the next two years, compared to 851 IPOs in the last six years.

 

"Any significant volatility in the primary markets also impacts other market segments. But having said that, the good part is that there is ample liquidity, and the market continues to deepen fundamentally. There is demand for good issues priced reasonably. The moment the secondary market stabilizes and volatility settles, we will likely see an increase in the number of offers," Lunawat added.