With only 3 listings in 2020, why have IPOs dried up on D-Street?

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26 Aug, 2025 12:21

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After a year of multiple successful listings, the Indian stock market has been on a dry run in the calendar 2020 with only three companies coming out with their initial public offerings on the main board. Mindspace Business Parks REIT is the latest company to come with an IPO, the other two being Rossari Biotech and SBI Cards and Payment Services.

Businesses are in desperate need of funds after COVID-19 roiled consumer demand, putting many companies into an existential crisis.

But at the same time, there is ample liquidity due to stimulus packages from central banks, a record number of retail investors and strong FII inflows. So why are companies not coming out with IPOs to raise the required funds? Experts say the jittery market conditions have put listings on the D-Street on hold.

"The markets are volatile. Hence, companies and merchant bankers are waiting for the markets to stabilize to get a reasonable valuation and a good response," said Atish Matlawala, Sr Analyst, SSJ Finance & Securities.

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The stock market has witnessed the highest of highs and the lowest of lows in 2020. After forming a new all-time high in January, benchmark indices crashed to multi-year lows in March as investors rushed out of equities, which is often considered the riskiest asset class with high sensitivity to domestic and global cues. Experts feel that even though the market has only moved upwards since March, we may still not be out of the woods just yet as the damage done by the pandemic unravels over the next few quarters.

According to them, new listings will only come after the uneasiness in the market settles, and the D-Street embarks on a new bull run.

"Historically, it has been seen that IPOs generally come along with a bullish sentiment. IPOs fit into a different category wherein sentiment of the market is bullish," said Nirali Shah, Senior Research Analyst, Samco Securities.

"In a bull market, people are generally upbeat and pour money to subscribe to companies which have no track record of listing history. Therefore, as the bull market progresses, large number of IPOs hit the market to raise capital. The current situation could just be the beginning of an IPO season," she added.