India’s IPO Market 2025 Faces Slowdown Amid Volatility, Yet Strong Pipeline Offers Hope

According to Prime Database, India's premier database on the primary capital market, the IPO market in FY2024-25 witnessed remarkable activity, with 78 companies raising a record-breaking Rs 1.62 lakh crore. This was a significant surge compared to the Rs 61,922 crore raised by 76 IPOs in the previous fiscal, reflecting heightened investor participation and market confidence.

The largest IPO of the year came from Hyundai Motor, which raised Rs 27,859 crore, followed by Swiggy at Rs 11,327 crore and NTPC Green Energy at Rs 10,000 crore. Meanwhile, the smallest IPO was launched by Kronox Lab Sciences, amounting to Rs 130 crore, demonstrating the wide spectrum of capital raised across different sectors.
The sharp rise in IPO activity was fueled by robust investor confidence, an expanding retail investor base, and increased participation from institutional investors and foreign portfolio investors (FPIs). Favourable macroeconomic conditions and strong corporate earnings also contributed to the buoyant IPO market.

However, the recent market crash has led to a slowdown in IPO momentum. The recent correction in equities, coupled with mounting concerns over Donald Trump's trade policies and global economic uncertainties, has dampened investor sentiment. As a result, several companies have been forced to delay their listing plans. Market analysts estimate that IPOs worth approximately Rs 25,000 to Rs 30,000 crore have been postponed due to the prevailing market conditions.

Despite the slowdown in the mainboard IPO segment, SME IPOs have remained active. The first two months of the current calendar year saw 20 SME IPOs each, raising Rs 880 crore and Rs 930 crore, respectively. However, March has seen a notable dip in activity, with only six SME IPOs launched so far, raising Rs 170 crore from investors. Interestingly, the total funds raised by SME entities in the first quarter of the current calendar year stood at Rs 1,980 crore, indicating steady demand for smaller-cap offerings.

Why IPO Release During A Volatile Market Is Not Desirable?

Launching an IPO during a volatile market environment poses significant challenges for companies. A fluctuating stock market increases uncertainty, leading to subdued investor sentiment and lower valuations. Companies risk pricing their shares at a discount or facing tepid demand, which could result in a weak listing performance.
Additionally, global economic instability and policy uncertainties further deter firms from going public during such periods. As a result, many companies prefer to wait for a more stable market environment before launching their IPOs.

A Strong Pipeline Ahead

Despite the current slowdown, the IPO pipeline remains robust, indicating long-term confidence in the capital markets. As of now, 67 companies are awaiting SEBI approval to collectively raise Rs 1.17 lakh crore. Some of the notable companies in this list are LG Electronics India, Indira IVF Hospital, HDB Financial Services (a subsidiary of HDFC Bank), Dorf Ketal Chemicals, Credila Financial Services, and WeWork India.

Additionally, a new wave of startups is gearing up to enter the capital markets. Companies such as Zepto, boAt, Shiprocket, and Milky Mist Dairy are expected to file their offer documents soon, signaling continued investor interest in high-growth sectors.

While near-term volatility poses challenges, the long-term outlook for India's IPO market remains promising, driven by strong economic fundamentals and growing investor participation.