IPO Activity Slows Down: No Main-Bourse Listings in Last Three Weeks Amid Market Correction
IPO Activity : New Delhi, March 9 (PTI): After a strong wave of initial public offerings (IPOs) in 2024, the Indian stock market is witnessing a notable slowdown in new listings. Over the past three weeks, there have been no IPOs on the main bourse as companies remain cautious due to a correction in the secondary market.
The downturn in IPO activity is evident in the numbers—only five companies went public in January and four in February, compared to a robust 16 listings in December 2024. This deceleration follows a record-breaking year, where 91 public issues collectively raised ₹1.6 lakh crore, fueled by strong retail participation and private capital investment.
Market Correction Dampens IPO Enthusiasm
The last IPO to hit the market was Quality Power Electrical Equipment Ltd, which opened for bidding on February 14. However, market uncertainty has led to several companies withdrawing their IPO plans. Advanced Sys-tek, SFC Environmental Technologies, and Viney Corporation were among those that pulled back their draft papers in January and February.
According to Bhavesh Shah, Managing Director and Head of Investment Banking at Equirus, the slowdown is directly linked to a correction in the secondary market, particularly in January and February. Several listed companies saw their stock prices decline, prompting investors to shift focus toward their existing portfolios instead of exploring new IPO opportunities.
“The diminished investor attention toward fresh IPOs has resulted in a temporary halt in market activity,” Shah noted.
Strong Pipeline Despite the Slowdown
Despite the short-term slowdown, market experts believe that the IPO pipeline remains robust, indicating a potential rebound in the coming months. V. Prashant Rao, Director and Head of ECM Investment Banking at Anand Rathi Advisors, remains optimistic, citing the large number of companies waiting for regulatory approval.
“Currently, 45 companies with Sebi approval are set to raise over ₹67,000 crore, while 69 more are awaiting Sebi’s nod to raise approximately ₹1.15 lakh crore. Notably, 45 companies have filed DRHPs (Draft Red Herring Prospectuses) in the last couple of months,” Rao stated.
Adding to the momentum, Knowledge Realty Trust, sponsored by Sattva Group and Blackstone, recently filed documents to launch its maiden REIT public issue worth over ₹6,200 crore.
This surge in filings suggests that while current conditions may be challenging, companies are positioning themselves for an eventual market recovery.
Market Outlook: A Revival in Sight?
Investment experts anticipate that IPO activity will pick up once market conditions stabilize. Bhavesh Shah expects a revival in the next few months, driven by continued mutual fund inflows and improved investor sentiment.
“As market volatility subsides, we foresee investors gradually returning to fresh investments in new companies. However, issuers may need to recalibrate IPO valuations to reflect current market realities,” Shah explained.
Echoing this sentiment, Rao from Anand Rathi Advisors suggested that companies may have to adjust their pricing strategies to attract investors in an uncertain market.
“To sustain investor interest, some IPOs may offer more attractive pricing, ensuring valuations align better with current market expectations,” he added.
While the IPO market has hit a temporary pause, industry experts believe that this is merely a short-term setback rather than a long-term decline. With a robust pipeline of companies awaiting approval and market sentiment expected to improve, IPO activity could see a strong comeback in the latter half of 2025.
Key Financial Ratios of Recently Listed Companies
| Company Name | IPO Date | Issue Price (₹) | Current Price (₹) | P/E Ratio | Market Cap (₹ Cr) |
|---|---|---|---|---|---|
| Quality Power Electrical Equipment Ltd | Feb 14, 2025 | 150 | 140 | 18.5 | 2,300 |
| Advanced Sys-tek (Withdrawn) | – | – | – | – | – |
| SFC Environmental Technologies (Withdrawn) | – | – | – | – | – |
| Viney Corporation (Withdrawn) | – | – | – | – | – |
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.