Don’t touch IPOs on day one: JM Financial’s Vishal Kampani warns retail of lock-in selloff risk

Kampani urges patience on new listings, flags upcoming PE exit supply and a record IPO pipeline for FY26.

Vishal Kampani, Vice Chairman and Managing Director of JM Financial, on November 23 advised retail investors to avoid buying newly listed stocks on listing day, saying early secondary-market enthusiasm often overlooks large share supply that comes later.

Speaking to CNBC-TV18 on the sidelines of the JM Financial India Xchange 2025 conference, Kampani urged investors to be patient with new listings. “Please give it time. Don’t rush in on day one to buy new listings. Just hold off,” he said. He added that retail investors are “far better off investing with some of the marquee mutual funds” instead of trying to capture early listing gains.

Lock-in expiries can change the supply equation

Kampani said post-IPO rallies are often driven by temporary supply constraints because anchor investors are locked in. He noted that once lock-in periods of 30 days, 90 days, or six months expire, selling pressure typically rises. “You’ll really see how some of these gains post-IPO play out after the lock-ups,” he said, pointing to private equity investors waiting to exit.

Private equity exits could keep some stocks flat

He linked the IPO surge to a large build-up of private equity investment in India. Kampani said India has seen about $350–400 billion of PE inflows in recent years and estimated that exits could total around $800 billion to $1 trillion in value over the next five to seven years. He added that roughly 25–30 percent of these exits may come through public markets, creating significant float.

According to Kampani, this overhang can keep stock prices flat for extended periods even when fundamentals remain healthy. “You can see two or three years of prices being almost flat… just because 70 percent of a company is up for sale,” he said.

IPO cycle likely to continue as PE reinvests

Kampani said the current IPO cycle is being driven largely by private equity, and expects the loop to continue as capital returned through exits is reinvested into younger firms, leading to more listings.

Market outlook tied to earnings recovery

On market performance, Kampani said index-level gains have lagged because earnings growth has undershot expectations. He pointed to FY25 earnings growth coming in closer to 8–9 percent versus expectations of 15–16 percent, which he said contributed to foreign portfolio investor selling. He added that sustained retail SIP inflows into mutual funds have helped support indices.

Kampani said he does not see major macro risks for India at present, citing deleveraged corporate balance sheets, strong banks and NBFCs, and nearly $700 billion in forex reserves. He said India’s longer-term growth outlook remains a key draw for global investors.

He expects earnings growth to improve, projecting 14–16 percent growth in FY26–27, which he said should support better market returns.

JM Financial flags record pipeline, NSE among big-ticket IPOs

Looking ahead, Kampani said JM Financial is handling its largest-ever IPO pipeline, with about Rs 1.2 lakh crore of filed issues. He estimated the broader market could see Rs 3–4 lakh crore of transactions, adding that IPO fundraising this year has already reached Rs 1.52 lakh crore, above last year’s Rs 1.54–1.55 lakh crore.

Kampani said next year’s fundraising could potentially double if several large offerings proceed. Among the upcoming deals, he highlighted the National Stock Exchange listing as a major potential issue. “That will be a very large and a very exciting IPO,” he said.