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Typically, the primary market mirrors the tone of the secondary market, and the selloff in equities saw many companies hit the pause button on their listing plans. As investors scrambled to manage existing portfolios amid volatile markets, enthusiasm for new offerings waned.
Consequently, companies that had planned ambitious fundraising rounds were also forced to wait for better times.
However, there are now tentative signs of a revival. Indian equities have bounced back, with benchmarks reclaiming lost ground. The return of risk appetite in the secondary market has led to a key question: Will this revive the IPO cycle?
The first major test of the market’s appetite comes from Ather Energy, the Bengaluru-based electric two-wheeler maker, which has launched a Rs 2,981 crore IPO. The IPO, was however, got off to a slow start.
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"While Ather Energy is a fundamentally strong company, its IPO did not receive the kind of overwhelming response that the market was anticipating. This suggests that it may still be too early to call a full-fledged revival of the IPO market," said Arpit Jain, Joint MD, Arihant Capital Markets.
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The outlook for the rest of the year is cautiously optimistic, according to analysts. With most uncertainties around US tariff threats, global inflation, and domestic policy now behind, the stage appears set for gradual improvement.
The broader revival will heavily depend on the continued stability and strength of the secondary markets, which are just beginning to show signs of recovery.
"If the current positive momentum continues, we could see a pickup in IPO activity in the second half of the year," said Arpit Jain, Joint Managing Director at Arihant Capital Markets.
According to market estimates, IPOs worth nearly Rs 2 lakh crore are waiting in the wings. Whether all of it materializes remains uncertain, but if stability persists, a large portion could hit the market.
Notable names like Reliance Jio — which could potentially deliver India’s largest-ever IPO at around Rs 40,000 crore — are expected to be key in reviving primary market sentiments. The quick-commerce player Zepto is preparing a Rs 7,000-8,800 crore listing, while NSE’s much-anticipated IPO could see light if regulatory hurdles are cleared.
Meanwhile, LG Electronics has paused work on the listing plans of its Indian unit amid volatility, according to a Reuters report.
Simran Jeet Singh Bhatia, Senior Equity Research Analyst at Almondz Global, believes the worst may be over for the primary market.
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"After a dull start, we expect the domestic primary market to regain momentum in the next two to three months," he said. The IPOs listed during the first three months of CY25 have posted an average gain of 25%-30%, despite broader market volatility.
This performance, Bhatia says, should help rebuild retail investor confidence, especially as valuations across sectors have moderated.
An important shift expected that companies have to contend with is realistic pricing. Companies are aware that frothy valuations may no longer be tolerated, particularly in an environment where investors are risk-sensitive. Reasonable pricing, coupled with quality names — such as NSDL, Tata Capital, Hero Fincorp, and Prestige Hospitality — could ensure better absorption of supply.
Analysts said the market is closely watching Ather Energy’s listing, which will be an early indicator. If it sustains post-listing and sees active trading interest, it could make other companies firm up their IPO plans.
If not, the revival of the IPO cycle could be delayed further. As things stand, the ingredients for a pickup — secondary market stability, investor interest, and a strong pipeline — are falling into place. "The market is healing, but patience will be the key."
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
