The Indian primary market witnessed an unprecedented boom in activity between December 2024 and early December 2025. A staggering 344 companies launched their initial public offerings (IPOs), mobilising a colossal ₹1.54 lakh crore from investors. This capital formation frenzy set a new historical benchmark, showcasing a powerful alignment of entrepreneurial ambition with public market appetite.
However, the capital raised is merely an input. For the investing community, the ultimate measure of success is the output: returns. A sobering analysis reveals that the median return across this vast cohort of new listings is a flat 0%. This statistic means that precisely half of the companies that went public in the past year are now trading below their original issue price.
The Fleeting Mirage of Listing-Day Gains
Initial data from the listing day painted a more optimistic picture. Approximately 64% of these IPOs debuted at a premium to their offer price, indicating robust initial demand and positive sentiment. Yet, this optimism proved transient. Fast forward to the present, and only 50% of these stocks have managed to stay above their issue price.
A granular breakdown provides clarity. Out of the total 344 IPOs, a solid 40% listed at a premium and continue to trade in positive territory. Conversely, 23% also listed higher but have since fallen below their offer price, erasing the early gains for investors who held on. True success stories are rare; a mere 6% of IPOs that listed below their offer price staged a recovery into positive territory. The remaining 27% listed flat or in the red and have stayed there. This data underscores a critical lesson: a listing-day pop is a poor indicator of sustainable performance.
A Barbell of Returns and the Timing Trap
The distribution of returns from these IPOs is far from a normal bell curve. It resembles a barbell, with extreme outcomes on both ends. On one side, a select group of standout performers delivered returns exceeding 100%, with the top gainer soaring over 400%. On the opposite end, a significant cluster of stocks is languishing, down between 50% and 80%. Notably absent is a large middle ground of stocks offering steady, moderate gains of 10-30%.
This extreme skew explains why the mean return is a positive 14%, a figure lifted artificially by a handful of mega-winners, masking the widespread underperformance. The analysis also highlights a clear timing pattern. IPOs launched in the first half of 2025 have, on average, outperformed those from the latter half. The period from September to November was particularly crowded, accounting for 68% of the year's total IPOs, and this cohort has delivered the weakest subsequent performance.
This trend is predictable. When issuance volumes peak, quality often dilutes. Promoters and investment bankers, capitalising on favourable market conditions, rush sub-par deals to the market. Companies with weaker fundamentals get pushed forward, and price discovery suffers as investor attention fragments across dozens of simultaneous offers. Peak supply frequently meets peak optimism, a combination rarely beneficial for buyers.
Key Takeaways for Disciplined Investors
So, what should investors learn from this comprehensive data set? First, selection is paramount over mere participation. The scattergun approach of applying to every IPO for quick listing gains is a losing strategy in aggregate, with odds barely better than a coin flip.
Second, an IPO deserves the same rigorous analysis as any secondary market investment. It is not a lottery ticket but an equity purchase at a price set by parties with different incentives. Scrutinising the business model, competitive moat, use of proceeds, promoter pedigree, and—most critically—valuation relative to listed peers is non-negotiable.
Third, investors must brace for inherent volatility. Newly listed stocks lack an established price history, making their post-listing journey unpredictable. Even fundamentally sound businesses can experience sharp corrections before finding stability.
Finally, a simple yet underutilised strategy is patience. Waiting for a few quarters of listed financial results allows investors to see if management delivers on its prospectus promises. While the entry price may fluctuate, the information asymmetry shrinks dramatically. Missing the first few months of trading is a far lesser risk than fundamentally misjudging the business.
The IPO market's dynamism will continue, and capital will keep flowing. The pivotal question remains: will this capital generate enduring wealth or merely facilitate its transfer? As the data from this record year emphatically shows, the answer hinges entirely on disciplined, selective investing.
