Now Reading: India IPO market matures as investors seek profits, fair valuations
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India IPO market matures as investors seek profits, fair valuations
India IPO market matures as investors seek profits, fair valuations
India's IPO market is shifting from momentum to maturity, according to Grant Thornton Bharat's latest report. Average oversubscription nearly halved to 39 times in FY26 from 71 times in FY25, while listing-day…
The Story in Brief
India's IPO market is shifting from momentum to maturity, according to Grant Thornton Bharat's latest report. Average oversubscription nearly halved to 39 times in FY26 from 71 times in FY25, while listing-day gains dropped to 7 per cent from 29 per cent. The average annual performance of IPOs stood at negative 17 per cent, showing that strong demand does not guarantee aftermarket returns. Smaller issues were hit hardest, with average listing gains of just 2 per cent.
Offer-for-sale transactions accounted for 61 per cent of mainboard proceeds, though fresh issues rose to 39 per cent from 35 per cent. Debt repayment was the biggest use of funds at 26 per cent, followed by capital expenditure at 21 per cent. Financial services led sectoral fundraising with about Rs 59,800 crore across 12 IPOs. The report warns that market timing, valuation discipline, and governance readiness will shape FY27.
The Indian Opinion
The narrative that India's IPO frenzy is a sure-shot wealth creator has taken a hit. Retail investors who piled into every issue expecting listing-day pops are now sitting on losses, with average annual returns at minus 17 per cent. The flip side is healthier: investors are rewarding governance and earnings quality over hype. The real test for FY27 will be whether fresh-issue share improves from 39 per cent, signalling that promoters put their own money behind their offerings rather than just selling stakes.
Source: businesstoday.in
This story was synthesised by AI from the source linked above.
