Retail frenzy fizzles as IPO market cools

India's public listing party has lost its allure for retail investors this year amid heightened global tensions, steep valuations, and weak listing performance.

- Mayur Bhalerao

Since February, their participation has cooled in both mainboard and small business maiden offerings, raising concerns about whether upcoming issues can revive enthusiasm.

So far this year, only 14 mainboard initial public offerings (IPOs) have hit the market—barely half of the 29 seen during the same period last year. On the small and medium enterprise (SME) platform, 72 companies have so far tapped the capital markets, down from 92 a year earlier.

The decline reflects growing caution among companies as investors lose their appetite for fresh issues.

Here is more proof. March stood out as an unusual pause, with no mainboard IPOs at all, while issues in February and May struggled to garner subscription and post-listing gains. According to Prime Database, four out of nine mainboard IPOs since February failed to get fully subscribed in the retail category and the same number debuted below their issue price.

Sentiment has also weakened among high-net-worth individuals (HNIs). Since February, over half of the mainboard IPOs failed to see full subscription from HNIs.

Recent examples include Aegis Vopak Terminals and Ather Energy, which also fell short in the HNI category, reflecting broad-based reluctance.