IPO supply unlikely to slow despite weak post-listing performance: Motilal Oswal AMC's Niket Shah

Niket Shah of Motilal Oswal AMC said that IPO activity is unlikely to slow in the near term, with issuance already nearing Rs 2 lakh crore. However, he noted that IPO investing has become increasingly challenging, as nearly 70% of stocks listed over the past one to one-and-a-half years are trading below their listing-day prices. This highlights the difficulty of consistently generating returns in the primary market, where only a small proportion of listings deliver meaningful gains.

Speaking at Dezerv Wealth Summit 2025, he pointed out that investor preference currently favours companies promising rapid growth over those with established profitability. Profitable businesses earning Rs 1,000 crore and growing at 25% often struggle to attract attention, while loss-making companies projecting Rs 3,000–4,000 crore in future revenues see overwhelming demand. While these new-age businesses appear exciting, making their unit economics work remains difficult, reflecting exuberance in certain segments of the market, Shah added.

Shah said that markets tend to correct themselves over time. If flows slow or IPO performance weakens, investor participation declines, valuations adjust, and demand becomes more selective. Over time, pricing recalibrates as the market responds to outcomes.

He added that the supply of IPOs is not expected to slow as long as the asset base continues to grow. Promoters remain willing sellers, and of the nearly Rs 2 lakh crore raised, around 60% has come through offers for sale.