Attributed to: Gaurav Garg, Research Analyst at Lemonn Markets Desk
India’s primary market in 2025 combined record-breaking activity with increasingly selective investor behaviour, creating one of the most active yet most rational IPO years in recent times. Mainboard listings climbed to 106 (up from 93 in 2024), raising ₹1.83 lakh crore. The SME market matched this momentum with 260 listings from January till date, raising ₹12,210 crore.
Issuance Mix and Demand Patterns
Automotive, consumer discretionary, and industrial companies led fundraising, supported by financial services and tech. The standout trend, however, was the shift in investor behaviour. Mainboard IPO subscriptions rose to 29.2x from 25.3x, with retail cooling to 7.7x amid valuation concerns. SMEs moved in the opposite direction, averaging 69.6x bids, driven by strong HNI demand at 186x but still lower than last year’s 175X overall and 427X in HNI category . This made SMEs the preferred high-risk, high-reward segment, with Q2–Q3 and September marking peak participation.
Listing Performance and Market Separation
2025 marked a sharp departure from 2024’s exuberance. Mainboard IPOs debuted with average gains of 9.06%, and SME listings at 11.23%, both significantly lower than last year’s highs. By August, nearly 30 SME and nine mainboard issues were trading below issue price, reflecting tighter scrutiny on valuations. A clear pattern emerged: smaller IPOs performed better. Issues under ₹2 billion delivered 37% gains, outperforming larger ₹50 billion-plus offerings at 29%, making the size-performance gap a defining theme.
Standout Moment: The LG Electronics Frenzy
Among all listings, one number dominated market conversations: ₹4.4 trillion. That’s the total value of bids received by LG Electronics, making it the highest bid amount ever for a domestic IPO. The issue drew 54x overall subscription and a staggering 166x from QIBs. Retail investors faced near-impossible odds, with most allocations decided through lottery, a pattern repeated across several high-interest offers.
Sentiment and Market Behaviour
Despite abundant domestic liquidity, sentiment remained cautious. Global headwinds, FPI outflows, valuation pushback, and a rise in OFS-led structures kept investors disciplined. Yet steady SIP flows and growing DII share ensured that supply never outpaced demand.
Overall, 2025 was a year of high volumes, sharper pricing discipline, and clear performance divergence, with SMEs dominating participation and smaller, sensibly valued offerings leading returns.
Outlook for 2026
We expect 2026 to be a stronger year for the Nifty compared to 2025. Several policy-driven tailwinds are likely to start reflecting in economic activity – including GST-related benefits and the growth impulse from the rate cuts implemented in 2025. The revised tax structure, with zero tax up to ₹12 lakh under the new regime, should further support consumption and household spending.
We also anticipate that H2 performance will outpace H1. While 2025 was largely a year of consolidation and correction, 2026 appears well-positioned for a growth rebound, supported by favourable policies and improved foreign inflows as global quantitative tightening pauses and easing cycles potentially resume.
Additionally, the upcoming Union Budget is expected to provide more room for infrastructure and capital expenditure, which had moderated last year due to a temporary dip in tax collections. This renewed fiscal push could further strengthen the investment cycle through 2026.
