India's Record IPO Rush: Rs 1.5 Lakh Crore Raised, But Most New Stocks Are Crashing!

The year 2025 has been exceptional for India's primary market in terms of capital raised, with over 90 initial public offerings (IPOs) collectively garnering a record Rs 1.5 lakh crore. Despite this substantial inflow of funds, the performance of these newly listed companies has been largely disappointing for investors. Unlike the robust debut rallies observed in 2024, many IPOs in 2025 have struggled, listing at par or even in negative territory. Several have continued their downward trajectory, trading significantly below their initial offering prices.

Among the worst performers are Glottis Ltd, which listed nearly 35 percent below its issue price and is now down 45 percent, despite strong revenue and profit growth. Gem Aromatics, despite a 30 times oversubscription, is trading about 35 percent below its issue price. Om Freight Forwarders debuted at a 33 percent discount, while BMW Ventures Ltd listed 29 percent lower. VMS TMT Ltd, Jaro Institute of Technology, Dev Accelerator Ltd, Laxmi Dental Ltd, Arisinfra Solutions, and Capital Infra Trust also feature among the top underperformers, with significant price drops post-listing.

Impact This trend of poor post-listing performance for most IPOs can significantly dampen investor sentiment towards the primary market. It may lead to reduced participation in future IPOs, especially for companies with weaker fundamentals or less compelling business models. Investors might become more cautious, demanding higher discounts or premiums for their investments, potentially slowing down the pace of fundraising and impacting the overall health of the stock market. The disconnect between capital raised and investor returns poses a risk to market liquidity and confidence.

Difficult Terms Explained: Primary Market: The market where securities are created and sold for the first time. This is where companies first offer shares to the public through an IPO. Initial Public Offering (IPO): The process by which a private company becomes a public company by selling shares to the public for the first time. Issue Price: The price at which a company offers its shares to investors during an IPO. Listing: The process where a company's shares are admitted to trading on a stock exchange, making them available for buying and selling by the public. Subscription: The extent to which an IPO is oversubscribed or undersubscribed, indicating investor demand for the shares. Logistics Solutions: Services that manage the transportation and storage of goods, including ocean, air, and road segments. Speciality Ingredients: Unique components used in various industries like cosmetics, pharmaceuticals, and food to provide specific properties or benefits. Aroma Chemicals: Synthetic or natural compounds that produce specific scents, used in perfumes, cosmetics, and household products. Nutraceuticals: Food products that provide health benefits in addition to their nutritional value. Personal Care: Products used for hygiene and grooming, such as soaps, shampoos, and cosmetics. Third-Party Logistics (3PL): Outsourcing logistics operations like warehousing and transportation to a specialized company. Freight Forwarding: Services that arrange the shipment of goods from the manufacturer to the market on behalf of shippers. Customs Clearance: The process of obtaining permission from government authorities to ship goods into or out of a country. Warehousing: The storage of goods in a facility before they are transported to their destination. Multimodal Transportation: Using more than one mode of transport (e.g., road, rail, sea, air) for a single shipment. Thermo-mechanically treated bars: A type of steel bar that has undergone specific heat treatment to enhance its strength and properties, commonly used in construction. Coworking Spaces: Shared office spaces that provide a flexible work environment for individuals and businesses. Dental manufacturing facilities: Factories where dental products, such as instruments or prosthetics, are produced. Procurement: The process of acquiring goods or services, especially by purchasing. InvIT (Infrastructure Investment Trust): An investment vehicle similar to a mutual fund, but for infrastructure assets like roads and power transmission lines, allowing investors to pool money to invest in such projects. Consolidated net loss: The total loss incurred by a company and its subsidiaries after accounting for all expenses and revenues, presented as a single figure. Gawar Construction: A company involved in infrastructure development, particularly roads and highways, which sponsors Capital Infra Trust.