2025 Median IPO return at zero despite listing pops, supply begins to bite

Median IPO return at zero despite listing pops, supply begins to bite

2025 wasn’t just a strong IPO (initial public offering) year, it quietly exposed how India’s primary market has changed.

The real shift wasn’t in how many companies listed, but who came to market, how aggressively they priced themselves, and how quickly investor patience thinned, once the listing pop faded.

According to an analysis by Dezerv, the median return of IPOs over the past year stands at zero, despite nearly three-quarters of new listings debuting at a premium. Of the 344 companies that went public during the period, around 72 percent delivered listing gains, but only about half continue to trade above their issue price, with nearly 94 stocks already surrendering all initial gains.

The IPO boom clearly split the markets into two: one where quality issuers were rewarded with durable demand, and another where froth met swift correction—sometimes within weeks.

Sandeep Jethwani, co-founder at Dezerv, said the data reflects a market where activity has stayed elevated, but outcomes are increasingly shaped by supply rather than sentiment. “Strong subscriptions and listing pops are typical of busy IPO phases,” he said. “What’s different this time is the speed with which returns normalise, once trading begins.”

Over the last 12 months, IPOs have raised more than Rs 1.5 lakh crore, turning issuance into a near-continuous process. Dezerv’s analysis suggests that while capital continues to clear comfortably at the primary stage, sustained supply has begun to weigh on post-listing performance. In such environments, liquidity gets thin spread , making returns far more sensitive to valuation discipline and earnings delivery.

While the average IPO return over the past year stands at about 14 percent, Jethwani cautioned that this figure is distorted by a small set of extreme outperformers. “The median tells the more useful story,” he said. “A handful of winners lift the averages, but most listings settle into far more modest outcomes.”

Growing share of OFS

Another defining feature of the current cycle has been the growing share of Offer for Sale (OFS) components in IPO structures, shifting the role of public markets from pure growth funding to facilitating ownership transitions.

Jethwani argued that this reflects where markets sit in the capital cycle rather than a deterioration in quality. “When valuations are generous and balance sheets are already strong, partial exits become rational capital allocation decisions,” he said. “Exit capital is not broken capital — it gets redeployed.”

Where Dezerv sees greater risk is in investor behaviour. Oversubscription figures, grey market premiums and listing-day moves have increasingly been treated as indicators of success, even though they say little about post-listing durability. “Those signals capture momentary demand, not long-term value,” Jethwani said.

Recent Moneycontrol reporting has also pointed to similar late-cycle dynamics, with several newly listed stocks struggling to hold on to early gains amid heavy issuance and selective liquidity. Analysts have flagged that even fundamentally sound businesses can underperform in the short term when supply remains elevated and capital is spread across too many listings.

Taken together, Dezerv’s findings suggest that the IPO market is not overheating in a traditional sense, but is entering a phase where outcomes are diverging faster than usual. In supply-heavy cycles, listing-day performance tends to be front-loaded, while longer-term returns depend far more on valuation comfort and execution. As issuance remains strong, the data indicates that selectivity — rather than participation — is once again becoming the key differentiator.