Are IPO listings still worth the risk for small investors?

A sharp fall in listing-day gains may limit the quick returns in a crowded 2026 IPO calendar

- Shefali Anand

2026 could be another big year for initial public offerings (IPOs) with more than 100 companies already receiving approval to raise about ₹1.4-trillion (around $15.5 billion), according to Prime Database.

Millions of retail investors flock to IPOs in the hope of earning quick profits by ‘flipping’ shares after listing, but seasoned participants urge restraint, often shaped by hard-earned experience.

“You have to not only learn from your mistakes, but also from the mistakes of others,” said Gopal Sharma, a 50-year-old French-speaking tourist guide in Delhi and IPO investor since 2008. “In my experience, one should not invest in seven out of 10 IPOs,” said Sharma.

He believes that lately IPOs are being priced at very high levels to provide an exit to angel and venture capital investors, leaving little scope for individuals to make money. “In most cases...small investors are made a fool of,” he said.

Sharma learnt this the hard way in 2021, when he got an allotment in the IPO of One97 Communications, which runs Paytm. At the time, it was India’s largest IPO and Paytm was a leader in digital payments. The IPO was oversubscribed by retail investors by 1.66 times, and issued at ₹2,150.

Sharma got six shares. They fell 27% on the listing day and kept falling in the next few months. “Still in Paytm shares, I am at a loss,” said Sharma. He is holding onto them, hoping for a rebound.

A generation earlier, investors had received a shock in the 2008 IPO of Reliance Power, then owned by Anil Ambani. The IPO was oversubscribed by 70 times overall, and the retail investors’ portion was oversubscribed 13.6 times. On listing day, its shares fell 17%.

Falling returns on IPO listings