Market correction hits IPOs, QIPs; half of 2024 issues now below issue price

markets

Around 40 percent of companies that debuted through initial public offerings (IPOs) in 2024, along with 50 percent of already listed firms that raised capital via qualified institutional placements (QIPs), are now trading below their issue prices amid the ongoing market correction.

In 2024, a total of 91 companies were listed on stock exchanges, collectively raising over Rs 1.6 lakh crore through IPOs. Of these, nearly 38 firms are now trading below their respective issue prices. Among them, 15 companies had listed at a discount and have seen further declines during the ongoing market correction, while the remaining 23 firms, initially listed at a healthy premium, have erased all their listing gains and are now trading below their issue prices.

Several companies that debuted through IPOs have faced significant declines in their market performance. Ecos India Mobility Hospitality, which listed at a 32 percent premium, is now trading at a 28 percent discount to its issue price. Similarly, Akme Fintrade India opened at a 10 percent premium but has also fallen to a 28 percent discount. Saraswati Saree Depot, which listed 32 percent higher, now trades 25 percent below its issue price, while Northern ARC Capital, after debuting at a 23 percent premium, currently trades at a 23 percent discount.

Companies that listed at a discount have seen their losses deepen amid market corrections. For instance, Western Carriers India Ltd and Capital Small Finance Bank, both of which listed at a 7 percent discount, have now plunged over 32 percent from their issue prices. Popular Vehicles & Services, initially 6 percent below its issue price, has fallen further to a 49 percent discount. Other firms like Suraksha Diagnostic, Ceigall India, and Godavari Biorefineries, which debuted with discounts of 2–5 percent, are now trading 20–25 percent lower among others.

Meanwhile, nearly 95 companies raised over Rs 1.36 lakh crore through QIPs in 2024, leveraging a strong market rally to sell stakes and raise capital. However, 55 of these firms are now trading below their issue prices.

Among the biggest QIP losers, KPI Green Energy has dropped over 60 percent from its issue price, while JTL Industries is down nearly 50 percent. Vikas Lifecare and Zodiac Energy are trading over 40 percent lower, with DB Realty and GPT Infraprojects are also down more than 30 percent among others.

Experts said underperformance of shares issued through IPO or QIP is directly linked to the fate of secondary markets. The benchmark indices after hitting the all-time high in September last year have been on either downward journey or are in phase of consolidation, trading sideways.

Another reason for the recently listed IPOs and QIPs losing shine is their aggressive offer price. Retail investors subscribe to the IPOs to take advantage of listing gains. The premium to the issue/offer price starts reversing once the game of listing gains is over. Also, once the lock-in period for institutional players gets lifted post one month of listing, the supply increases in the market affecting the price, experts added.

Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities said the recent underperformance of newly listed securities is also linked to the corporate performance of the last two quarters. The slowdown in the economy due to a variety of reasons have impacted the revenue and profitability of corporations. This has also added to the underperformance of the securities offered in IPOs and QIPs.

Indian markets have experienced a correction in 2025, with benchmark indices Sensex and Nifty declining over 2.5 percent each, while the broader BSE MidCap and SmallCap indices have dropped over 8 percent each. BSE IPO index lost nearly 11 percent. This downturn has been attributed to significant selling by foreign institutional investors (FIIs).

IPOs and QIPs in 2024 saw overwhelming investor demand, with many being oversubscribed multiple times. These offerings proved highly profitable, delivering impressive returns of 50-80 percent—and in some cases, exceeding 100 percent—on listing.

Devarsh Vakil, Head of Prime Research at HDFC Securities, noted that the high subscription levels and premium listings of IPOs and QIPs are not always indicative of a company's long-term growth potential. Many investors participate in these offerings with the intention of flipping their investments upon listing to secure short-term gains.

He also emphasised that long-term investors should carefully evaluate offers for sale (OFS) in IPOs, especially when existing shareholders are offloading stakes at valuations higher than those of comparable peers in the secondary market. Conducting thorough due diligence is crucial before making investment decisions in such cases, he says.

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