Despite strong investor demand during the subscription phase, recent IPOs have delivered underwhelming post-listing performance. Most newly listed stocks have seen modest or flat gains, raising concerns over aggressive pricing and limited upside in a market already near record highs.
In fiscal 2026 so far, 14 companies have been listed on the exchanges. Of these, eight firms debuted with only marginal gains, while two listed below their issue prices. Post listing most of them continue to trade around their listing prices.
According to data from Moneycontrol, the average listing day gain this fiscal year stands at just around 9 percent, a sharp decline from 30 percent in FY25 and 29 percent in FY24.
Analysts caution that investors who typically buy IPOs for short-term gains and exit within days may now be left with minimal profits—especially after factoring in short-term capital gains tax and brokerage fees.
Deepak Jasani, an independent research analyst, noted that IPO pricing has become increasingly aggressive. "Investment bankers and promoters are pricing offerings at very high valuation multiples, given that the broader market is already near all-time highs. As a result, IPOs leave very little value on the table for investors," he said.
Jasani added that when IPOs fail to list at a strong premium, short-term investors tend to exit quickly. “If the listing isn’t significantly higher, these pain-averse traders exit immediately,” he explained. While IPOs have still been receiving reasonable responses, a continuation of this trend could lead to waning investor interest in the coming months, he warns.
For instance, Ather Energy listed at a discount despite a total subscription of 1.5 times and continues to trade flat. Borana Weaves, which saw 148 times subscription, listed at an 18 percent premium but has since declined to its issue price. Similarly, Schloss Bangalore, subscribed nearly five times, listed flat and remains flat.
Aegis Vopak Terminals, after 2.2 times subscription, listed at just a 3 percent premium and is now trading only 1 percent above its issue price. Oswal Pumps and Kalpataru also debuted marginally higher but now trade flat. Arisinfra Solutions, despite strong interest, listed at a 21 percent discount.
HDB Financial Services, which listed on July 2, is trading just 14 percent above its issue price. Investors who purchased the stock in the unlisted market at around Rs 1,300 per share are facing substantial losses, as the stock debuted at around Rs 840.
According to Deven Choksey, Managing Director of DRChoksey FinServ, many recent IPOs have already factored in future earnings into their pricing, leaving no upside potential for investors. “If all future growth is already priced in, there is nothing left on the table,” he remarked.
He also noted that institutional investors, sitting on large cash reserves and unable to deploy capital in overvalued secondary markets, are using IPOs to rebalance their portfolios. Additionally, mutual funds often receive preferential allotments below the issue price, creating disparities in the market.
With limited upside and the supply of new shares overwhelming demand, many IPO investors are unwilling to hold the stocks long term. Analysts expect that going forward, investors will become more discerning about valuations and entry prices. It is increasingly evident that the IPO market is being dominated by traders rather than long-term investors. The creation of separate quotas for anchor and institutional investors reflects a trading-focused approach rather than one rooted in investment fundamentals.
Meanwhile, despite the overall subdued listing trend, a few IPOs have managed to deliver strong returns. Ellenbarrie Industrial Gases and Globe Civil Projects debuted with impressive gains of over 33 percent on listing day, while Prostarm Info Systems recorded a listing gain of more than 20 percent.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
