Amid a flurry of IPOs since January 2024, only a sliver of newly listed companies — just 6% — have managed to more than double investor wealth. The standout six include Jyoti CNC Automation, KRN Heat Exchanger & Refrigeration, Bharti Hexacom, Premier Energies, SRM Contractors, and Interarch Building Products, which have returned between 102% and 267% from their issue prices, according to Moneycontrol’s analysis of 101 listings. Their performance offers clues to what the market is rewarding in a tougher IPO landscape shaped by valuation resets, sectoral tailwinds, and post-listing earnings delivery.
With markets coming close to the peak, and the IPO market starting to pick up again, analysts warn that the evidence of the past shows that only a handful of IPOs might make money and urge caution among investors.
The winning formula
“The outperformance of IPOs was seen in sectors where the growth is very high,” said Umesh Agrawal, Fund Manager at 360 One Asset. “This growth is being driven by macro themes such as increasing focus on renewable energy, strong domestic demand in affordable retail, and the government’s push to position India as a global manufacturing hub under the China+1 strategy,” he added.
2024 was a kind of market where the proverbial, “when the going gets tough, the tough get going” was applicable. Siddharth Bhamre, Head of Research at Asit C Mehta, says that the IPO market, after the COVID-era bull run, is now demanding evidence of fundamentals. “Wherever there has been good story and earnings and valuation support, those stocks have managed to move above issue prices. The rest struggled,” he said.
Bhamre explained further that many IPOs were priced aggressively in 2024. “Valuation comfort was not there in 2024 for most IPOs. A sector that should be valued at 30-40x was being priced at 65-70x. Nobody cared about earnings because the underlying equity market was so strong,” he said. “But when the market corrected, mean reversion followed. Now, only companies with cushion from valuations and earnings are being rewarded,” he said.
Only for the discerning
With many IPOs failing to hold above their issue prices, the market is now more discerning. “This market has turned from a broad-based ‘invest anywhere’ phase into a selective one,” said Bhamre. “Now, only those companies are doing well where there is earnings support or valuation comfort,” he added.
Analysts point out that momentum without margin is no longer enough. The fact that several of these outperformers lack traditional brokerage coverage has also changed how valuation narratives are shaped. “One should look at least five years of revenue and profit CAGR,” said Bhamre. “Often, companies highlight one or two strong years pre-listing to inflate valuations. Investors should now be asking: can this growth sustain on a higher base?”, he thought.
In that light, the quarterly results post-listing has become a crucial lens through which investors judge value. Where companies have sustained margins, improved working capital, or demonstrated capacity utilization, the market has responded. Besides, Agrawal says, “Some of these companies that have done well are also sizeable, well-run firms in their sectors. That too matters now — execution and scale are getting rewarded.”
While the IPO pipeline for the rest of 2025 remains strong, like 2024 has shown, only a few may deliver similarly outsized returns.
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