IPO rush returns after a lull as shareholders seek exits
In the past week, HDB Financial Services Ltd's ₹12,500 crore initial public offering (IPO) sailed through. Alongside, prominent startups including Wakefit, Curefoods, Shadowfax and Pine Labs filed their draft papers with the regulator.
More than 50 companies have already received approval from the Securities and Exchange Board of India (Sebi) and are waiting to favourably time their listing date based on market conditions and performance, according to data from Prime Database. Among them are Bluestone, Kent RO Systems, Indiqube Spaces, Anthem Biosciences, Aye Finance and Veritas Finance.
'The current IPO pipeline is more than US$45bn with more than 50 companies wanting to tap IPO markets, large part of which will likely get listed in second half of this financial year," said Kaushal Shah, managing director and head-equity capital markets, Kotak Mahindra Capital Co., adding that the momentum will continue, and investor sentiment will grow stronger.
That's not all.Over 50 firms have filed their draft papers with Sebi and are waiting for the regulator's approval to go public by later this year or early next year. According to Prime Database, these include Tata Capital, Physicswallah, Pine Labs, Capillary Technologies, CureFoods, Orkla India, Gaja Capital, Shiprocket, Groww, Urban Company, Lalithaa Jewellery Mart, Hero Motors. Others such as German Green Steel and Power, Silverton Industries, and Juniper Green Energy have also filed their preliminary papers with the regulator over the last week.
In the first six months of 2025, about 24 companies went public to raise about ₹45,334 crore compared with ₹31,279 crore across 36 companies a year earlier, according to Prime Database. However, 2024 was a record year for IPOs with ₹1.59 trillion raised across 91 companies. The pace slowed as global uncertainty deepened after September last year.
The recent de-escalation in geopolitical tensions, expectation of easing trade uncertainties coupled with other macro factors like strong GDP growth and reduction in interest rates has resulted in reduced market volatility, reinforcing investor confidence enabling recovery in deal activity, said Amitabh Malhotra, vice chairman of investment banking at HSBC India.
'The recovery started from April 2025 onwards when the selling intensity of FIIs eased, with them turning net buyers…," Malhotra said. 'With many companies getting ready/already lining up for public filings and on the back of the robust H2 2025 pipeline, we believe the momentum would continue."
Startups including Inframarket, Ofbusiness, Moneyview, Kissht, Meesho and Turtlemint are also expected to file their draft papers soon.
The Indian capital markets are seeing a diversity of sectors tapping an IPO on the back of strong macro and company performance, according to Shah of Kotak Mahindra Capital. 'The capital markets are providing an alternative for raising growth capital as well as monetization by shareholders, which otherwise have been restricted."
Calibrated valuations
The rebound in IPO activity reflects investor optimism after a period of volatility triggered by US President Donald Trump's decision to impose tariffs on trading partners and geopolitical tensions since the beginning of this year.
The Indian markets remained volatile in the past six months, with Nifty falling 6.7% from 1 January till 7 April, before scripting a rebound to near record levels. Increased uncertainty meant IPOs also dried up, with April accounting for only $350 million. Many companies were also forced to review their issue sizes and valuations, while companies like LG Electronics India decided to delay their market debut to wait for more favourable market conditions.
However, May and June saw $2.7 billion worth of IPOs, backed by a revival in secondary markets, sell downs and follow-on fund raises, Kotak's Shah said.
Some of the prominent issues this year include HDB Financial Services IPO late last month, Hexaware Technologies Ltd.'s ₹8,750 crore issue in February, Schloss Bangalore's ₹3,500 listing in May, Dr. Agarwal's Health Care's ₹3,027-crore offering in January and Ather Energy's ₹2,981 crore IPO in April.
IPO
'While there have been few isolated cases of some of the startups having faced delays in their IPO process because of market and geopolitical conditions, we can expect to see many of them hit the street in the next 3-6 months," said Abhishek Bhagat, managing director of JM Financial's Digital & Technology Investment banking arm. 'Valuations have also undergone some correction over the last few months as the delta between the expected and the trading price has reduced," he added.
For example, Ather Energy reduced the size of its IPO to a little over ₹2,600 crore at the time of the listing, down from the initial target range of up to ₹3,100 crore. Its valuation also narrowed to $1.4 billion, lower than its previous target of $2 billion.
Valuation calibration in some of the recent issuances reflects the sensitivity surrounding external factors despite the market being at a nine-month high, said Malhotra of HSBC India.
Shareholders seeking exit
While 2024 saw a record IPO mop-up, more than half of ₹1.59 trillion was driven by the offer-for-sale component as several fund managers backing these companies were at the end of their fund lifecycle. This meant that they needed to sell substantial stakes in these IPOs to return money to their investors.As exit pressure lingers and with companies having the capability to raise capital even post-listing, JM Financial's Bhagat expects the trend of a larger OFS component to continue dominating some of the issues this year.
With more signs of stability, the primary market is also expected to witness higher activity as it essentially mirrors the performance of the secondary market, said Prime Database's managing director Pranav Haldea. The companies that typically launch IPOs after a lull are either in dire need of capital or where the selling shareholders are putting pressure to get an exit, he said.
There is also a third bracket of companies that have done about three to four years of legwork in getting IPO ready and Sebi nod. They would rather just go ahead, even at lower valuations, instead of letting the approval lapse and shelving the entire process, said Haldea.
'Although there weren't that many issue launches in the first half of the year, as many as 115 companies still filed their draft papers with Sebi for approval. So, the pipeline has increased significantly and will need a release," Haldea said. 'These companies also understand the new market reality. Also, good companies with strong fundamentals and governance can grow to their true potential even after they list, thus not necessitating value maximisation at the time of IPO."
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