India’s capital markets are in the midst of one of their busiest phases ever, with the IPO pipeline in 2025 continuing strong despite some cooling. As of mid-2025, around 108 IPOs have raised $4.6 billion, a 30% decline in volume from the previous year, but with stable proceeds, signaling a shift toward higher-quality issues over sheer quantity. This follows a record-breaking 2024, when IPO proceeds doubled to $11.2 billion from $5.5 billion in 2023.
Looking ahead, 162 companies are projected to raise nearly ₹2.4 lakh crore ($28.6 billion) this year. The big question now facing investors is clear: do these valuations reflect genuine growth potential, or is India heading into overheated territory?
The Surge in IPOs: Drivers and Trends
The IPO boom has been fueled by structural and cyclical forces:
- Robust Economy: With GDP projected to grow 6–7% annually, India remains one of the fastest-growing major economies.
- Liquidity Surge: Systematic investment plans (SIPs) have grown at a 28% CAGR, providing a steady stream of domestic capital.
- Regulatory Tailwinds: A transparent listing framework and strong SEBI oversight have boosted investor trust.
- Sectoral Diversity: From tech and renewables to cement and logistics, offerings span across India’s growth spectrum.
In the first half of 2025 alone, 39 mainboard IPOs raised ₹510 billion ($6.1 billion), with average listing gains of ~70% in Q1. That said, gains tapered off as global volatility and interest rate uncertainty grew.
India also commands 22% of global IPO activity in Q1 2025, raising $2.8 billion across 62 offerings—making it one of the world’s hottest IPO markets.
Yet, beneath the momentum lies a reality check: IPOs since late 2024 have delivered muted post-listing returns, reflecting growing investor selectivity.
Notable IPOs and Their Performance
Several high-profile IPOs in 2024–2025 highlight the mixed outcomes of this boom:
- Vikram Solar: Raised capital at aggressive valuations (P/E over 40x), backed by strong order books. However, shares remain volatile, trading 20–30% below peaks.
- Premier Energies: Priced at ₹427–450 per share, marking a 1,000% valuation jump from its placement price just a year earlier. Entirely an offer-for-sale issue, raising concerns over promoter exits. After initial gains, the stock corrected 15–20%.
- JSW Cement: Priced in line with industry leader UltraTech Cement, leaving little upside, yet showing the trend of IPOs priced at premiums to peers.
- Winners: M&B Engineering (up 20.44%), National Securities Depository (up 48.69%), Sacheerome Ltd (up 75.49%).
- Laggards: Laxmi India Finance (down 8.45%), Ola Electric (₹160 → ₹40), Tata Technologies (₹1,400 → ₹700).
The SME IPO space has seen even more dramatic moves:
- Owais Metals listed at ₹275 and surged to ₹1,500, valuing it at ₹2,700 crore despite just ₹80 crore in revenues.
- Kodytech soared from ₹200 to ₹3,600, now valued at ₹2,300 crore on ₹25 crore revenues—clear signs of valuation excesses.
Arguments for Justified Valuations
Supporters argue that Indian IPO valuations are not irrational, but reflect structural strengths:
- Growth Premium: Sectors like renewables, EVs, and digital services justify higher multiples due to long-term potential.
- Liquidity Backing: Domestic inflows through SIPs and insurance funds are outpacing even nominal GDP growth.
- Global Confidence: India’s 22% share of global IPOs in Q1 reflects strong foreign investor belief in the India story.
- Market Depth: Experts like Vishal Kampani (JM Financial) see IPOs adding $2–3 trillion in market cap over the next decade.
Signs of Overheating
Critics, however, see classic signs of a bubble:
- Excessive Pricing: Many IPOs are valued at 5x fair value or 10x private equity entry costs.
- Exit Route for Promoters: Entire offer-for-sale IPOs (like Premier Energies) raise red flags.
- SME Mania: Cases like Kodytech echo the 1990s IPO frenzy, where wealth was destroyed after initial euphoria.
- Volatility and Corrections: Listing gains have dropped in 2025, while post-listing performance has disappointed.
- Anchor Investor Risks: Analysts suggest “friendly anchors” help inflate subscriptions, leaving retail investors exposed.
Bloomberg recently questioned whether India is a “bubble about to burst”, citing sharp declines in new-age IPOs like Ola Electric and Tata Tech.
Expert Opinions and Market Sentiment
- Sandip Sabharwal (Analyst): Warns against IPOs priced higher than industry leaders, calling it “reverse pricing.”
- Anurag Singh (Value Investor): Predicts SIP investors may struggle for even 10% annual returns this decade.
- Kotak Investment Banking: Believes valuations are “reasonable” in a global context, with further upside ahead.
- Market Voices (X/Twitter): “Hype is temporary, valuation is permanent”—a growing cautionary theme.
KPMG reports that NSE alone raised $17.3 billion in FY25 IPOs, while Livemint notes 163 offerings raising ₹67,000 crore by July 2025, showing the scale of activity.
Conclusion: Navigating the Boom Wisely
India’s IPO market in 2025 is both a symbol of economic dynamism and a warning bell of excess. While high-growth firms in renewables, technology, and infrastructure may justify their rich valuations, frothy SME pricing, aggressive PE exits, and parallels to past manias cannot be ignored.