Record-Breaking IPO Season Captivates Indian Investors
The Indian primary market is experiencing an unprecedented boom as initial public offerings (IPOs) continue to attract massive investor attention. So far in 2025, nearly 93 companies have raised approximately ₹1.54 trillion through public issues, creating waves across the financial landscape.
Retail investors are participating with extraordinary enthusiasm, with the retail portion of these IPOs being subscribed over 24 times on average. This overwhelming response reflects the growing confidence of individual investors in the public offering space.
Experts Voice Concerns Amid the Euphoria
Shyam Sekhar, chief ideator and founder of ithought Financial Consulting LLP and a Mint columnist, attributes this frenzy to reforms that have made IPOs faster and more accessible. However, he highlights the concerning flip side: retail investors are increasingly behaving like speculators, treating public listings as a form of lottery rather than informed investment decisions.
Institutional investors have further fueled this momentum through substantial anchor allotments, deploying large sums that amplified the IPO buzz. According to Sekhar, the strong retail and institutional demand has encouraged investment bankers to push for higher valuations, resulting in increasingly overpriced IPOs entering the market.
Caution Advised for Retail Participants
Financial experts are urging retail investors to exercise caution and not get carried away by the prevailing hype. Jash Kriplani emphasizes the importance of thoroughly studying IPO documents to assess business quality, valuations, promoter intentions, and key risks before making investment decisions.
Dhirendra Kumar, founder and CEO of Value Research, offers a critical perspective, suggesting that the recent surge of public offers primarily serves as an exit channel for current promoters rather than genuine fundraising for company growth. He argues that investors might find better opportunities in secondary markets, where companies have proven business models, real profits, and more reasonable valuations.
Alternative Wealth Building Strategies
For Mint Money readers, experts recommend considering mutual funds as a more stable approach to participating in India's growth story while building long-term wealth. This strategy offers diversification and professional management, reducing the risks associated with direct stock picking in volatile IPO markets.
The current investment landscape also highlights the importance of understanding lock-in periods in various financial products. Khyati Dharamsi explains how instruments like Equity Linked Savings Scheme (ELSS) and Public Provident Fund offer tax benefits but require longer commitments, with lock-ins that can even complicate access to funds after the holder's death.
As the IPO season continues to dominate financial discussions, experts unanimously stress the need for due diligence and cautious optimism among retail investors navigating this exciting but potentially risky market segment.
