There is potential for initial public offerings to continue their upward trajectory, as evidenced by the fact that India's newest stocks are defying a nationwide market selloff.
23 stocks that have debuted in India this year are up 15% on average from their offer prices, according to data compiled by Bloomberg. By comparison, this year has seen a more than 2% decline in the benchmark NSE Nifty 50 Index.
The Nifty 50 has gone through its worst monthly losing streak since 2001 amid concerns about slowing economic and earnings growth, reversing the robust rally in Indian shares last year. The demand for new equity offerings is still high, though, as the securities regulator notes that it is now processing more than 60 IPO applications.
Neha Agarwal, managing director and head of equity capital markets at JM Financial Institutional Securities Ltd., based in Mumbai, stated that new listings would keep appearing. "The domestic investors are very confident, so I don't think you're going to see a pullback on that."
Initial share sales in India are predicted to bring in $25 billion to $30 billion this year, exceeding the nearly $21 billion in 2024 profits that set a record, according to Agarwal. She also predicted that companies will raise more money this year than they did the year before by selling shares directly to institutions.
It is not entirely true that IPO stocks are impervious to the decline in sentiment. Similar to the overall market, some of the major listings from the previous year have experienced selling pressure.
Swiggy Ltd., a food delivery and quick commerce company, saw a 53% increase in shares in the five weeks after its November launch, but that spike has basically vanished. Since Hyundai Motor India Ltd.'s historic $3.3 billion share sale in October, the company's shares have not yet moved above their IPO price.
With the exception of one, the majority of 2025's listings have raised less than $100 million. LG Electronics Inc. of South Korea plans to list its Indian division, potentially raising over $1 billion, as part of larger upcoming sales. This year, HDB Financial Services Ltd., a division of the biggest private lender in India, plans to raise up to $1.5 billion through an initial public offering.
"At the moment, we observe a substantial equity pipeline," stated Kunal Vora, BNP Paribas SA's India strategist.
Domestic mutual funds, which see monthly inflows of roughly $3 billion from mom-and-pop investors, are contributing to the demand for equity issuances, including initial public offerings (IPOs), placements, and block trades, according to Vora. As long as the supply is sufficiently absorbed, the trend will continue, he continued.
