by Ankita Lodh on 29 May 2025, 5 minutes min read
India’s IPO market has been buzzing since last year. In 2024, Indian companies raised approximately $19–21 billion via IPOs. It made India the second-largest IPO market globally, behind only the United States.
Although in 2025, India’s IPO activity remains strong, it has moderated. Q1 2025 saw a 20% decline in activity compared to Q1 2024.
However, for retail investors, participating in IPOs still seems like a big opportunity. Many are jumping in, hoping for strong listing gains. But alongside the buzz, there are real risks. Understanding both sides of the story is essential before you invest.
Let’s begin!
Also read: Should You Invest in IPO? A Beginner’s Guide to IPO Investment in India
Several factors are pushing this boom.
The Indian economy has remained strong. GDP growth has been steady and is projected to grow by 6.4–6.5% in FY 2024–25. Foreign direct investment (FDI) inflows increased by nearly 18% year-on-year, from $47.2 billion in the first eight months of FY24 to $55.6 billion in the same period of FY25. Global investors continue to see India as a bright spot amid global volatility.
There’s also a rise in retail participation. More Indians are opening Demat accounts than ever before. Trading apps and platforms have made it easier to invest. IPOs are attracting first-time investors because of the excitement around listing day profits.
Another reason is the wide range of companies going public. Tech firms, consumer brands, renewable energy companies, and financial startups are all lining up to list.
| Year | Number of IPOs | Total Proceeds (USD Billion) |
| 2023 | 235 | $7.9 |
| 2024 | 338 | $20.99 |
| Q1 2025 | 62 | $2.8 |
IPOs allow you to invest in a company at the start of its public journey. If the company grows, your investment can grow too.
Take the case of Tata Technologies. The IPO, priced at ₹500 per share, was oversubscribed 69.43 times overall, with the retail portion subscribed 16.5 times.
On its listing day (November 30, 2023), Tata Technologies debuted at ₹1,200 per share, delivering a listing gain of 140% over the issue price, making it one of the highest listing-day returns in recent Indian IPO history.
Investing in IPOs gives you exposure to new sectors. This helps diversify your investments beyond large-cap and traditional stocks. The 2024 IPO list included companies in electric vehicles, healthcare, SaaS, and fintech.
Listing gains are a big reason many investors flock to IPOs. For example, BLS E-Services Ltd. listed in February 2024 at ₹305 per share, compared to its issue price of ₹135, delivering a listing gain of approximately 125.93% for investors.
This IPO stands out as one of the most successful debuts of the year, with strong investor demand and a significant premium on listing day. In a rising market, these profits can add up quickly.
Also read: Upcoming IPOs 2025: Top 5 Upcoming IPOs List to Look Out For
Many companies are pricing their IPOs aggressively. They take advantage of strong investor demand. But when the valuation isn’t backed by strong fundamentals, trouble follows.
In some cases, stocks have dropped below their IPO price soon after listing. Retail investors who entered during the hype end up with losses.
Stock markets are always unpredictable. IPOs are even more volatile, especially in the first few weeks after listing. Any negative news can send the stock price down.
Recent IPOs like Schloss Bangalore and Aegis Vopak saw weak retail demand. The issue was valuation. Many investors thought the pricing didn’t match the company’s real value.
Many investors apply for IPOs just to sell on listing day. In fact, SEBI data shows that over half of retail investors sell their shares within a week.
This short-term mindset adds pressure to the stock. It also prevents investors from enjoying long-term gains. Investing without a clear plan can backfire.
Do Your Own Research
Don’t rely on social media tips or WhatsApp forwards. Read the company’s draft red herring prospectus (DRHP). Check their revenue, profits, debt, and promoter background. Look at how they plan to use the funds.
Don’t Follow the Crowd
Just because an IPO is getting attention doesn’t mean it’s a good investment. Stay clear of hype. Your financial goals should decide where you invest.
Think Long Term
Ask yourself if you believe in the company’s long-term vision. If yes, consider holding the stock for a few years instead of selling it at the first sign of a gain.
Understand the Allotment System
If you’re applying under the retail quota, know that allotment is done via lottery when demand exceeds supply. Having realistic expectations can save you frustration.
The Indian IPO market has been in the news since last year. That doesn’t mean every IPO is worth investing in. While some will deliver great returns, others might disappoint.
Retail investors must go beyond the headlines. Study the company. Understand the risks. Avoid investing with emotion or fear of missing out.
IPO investing can be rewarding, but only if you make informed decisions.
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