The year 2025 will be remembered as a landmark period for India's primary market, shattering records for capital mobilization and delivering electrifying listing-day rallies. However, as the year concludes, the initial euphoria is giving way to a sobering reality check, revealing a stark contrast between early hype and sustainable long-term returns for many new entrants.
The Fading Glow of Listing Day Gains
Data reveals a significant shift in the fortunes of companies that went public in 2025. Out of the 103 mainboard IPOs launched during the year, a strong majority of 69 companies made their market debut above their issue price, while 33 listed below it. However, the picture had drastically changed by December 26. Only 54 stocks managed to hold ground above their IPO price, while 47 had slipped into negative territory. This trend underscores that the initial listing-day enthusiasm failed to translate into durable valuations for a large section of these companies.
"Many big-name IPOs saw strong initial enthusiasm but failed to sustain valuations post-listing," observed Dev Chandrasekhar, partner at Transcendum. He pointed out a critical challenge: "Without fresh capital for growth initiatives, these companies must rely entirely on operational improvements to justify premium valuations, a tougher ask in competitive markets."
A Record Year with Mixed Outcomes
Despite the uneven performance, 2025 was undeniably historic for capital raising. Mainboard IPOs mobilized an unprecedented Rs 1.75 lakh crore, the highest sum ever recorded in the history of India's equity markets. The SME platform also witnessed frenetic activity, with 267 companies collectively raising Rs 11,429 crore.
A closer examination of the underperformers reveals a telling pattern. The ten worst-performing IPO stocks of the year all had issue sizes below Rs 1,000 crore, with many shedding between 30% to over 50% of their value from the offer price. For instance, shares of Glottis plummeted 52.78% from its IPO price of Rs 129, Gem Aromatics fell 48.34%, and VMS TMT declined 46.25%.
Large Offers Show Resilience, But Not Universally
On the brighter side, larger offerings demonstrated greater resilience. Six of the year's best-performing IPOs had issue sizes exceeding Rs 1,000 crore. Meesho, which raised Rs 5,421 crore, is trading more than 78% above its issue price. Billionbrains Garage Ventures, the parent of brokerage Groww, launched a Rs 6,632 crore IPO and is currently up 65%.
However, performance among the year's biggest issues has been mixed. While Tata Capital, HDB Financial Services, LG Electronics India, and ICICI Prudential Asset Management all listed at a premium, their post-listing journeys diverged. LG and ICICI Prudential extended their gains, but HDB Financial Services saw its upside narrow to around 2% after opening nearly 14% higher on its first day.
"The market is beginning to differentiate between quality and hype," stated Ganesh Jagdishen, CEO of Mumbai-based Plutus Global. Chandrasekhar echoed this sentiment, noting that the widening gap between listing gains and longer-term performance highlights how pricing is often driven by market sentiment rather than business fundamentals.
Top Performers and Investor Advice
Leading the pack of gainers is Stallion India Fluorochemicals, which skyrocketed 146.28% from its IPO price. It is followed by Aditya Infotech (up 122.71%), Ather Energy (121.14%), and Belrise Industries (99.33%). Other strong performers include Jain Resource Recycling, Quality Power Electrical Equipments, and Anlon Healthcare.
With evolving market conditions, experts are urging investors to adopt a cautious approach. Chandrasekhar advises a wait-and-watch strategy over chasing fresh listings, recommending that investors "must track post-listing performance before taking exposure, especially when growth capital is limited."
As the market turns its gaze towards 2026, the focus is expected to shift from headline-grabbing debuts to meticulous stock selection. "Retail investors should learn to look beyond glamorous listing gains and focus on business fundamentals," Jagdishen advised, emphasizing that this is particularly crucial "in a rising interest rate environment where growth capital becomes expensive."
