Markets
Brakes Slammed On IPO Bandwagon, Market Roughness Scares Suitors, $520 Billion Lost In 2025
India’s once-thriving initial public offering (IPO) market has hit a major roadblock, with a sharp downturn in stock prices, weakening investor sentiment, falling grey market premiums, and disappointing performances of recently listed stocks forcing companies to put their IPO plans on hold. The prevailing market turbulence has made businesses rethink their fundraising strategies, causing significant delays in public offerings.
Market Meltdown Of A $520 Billion Setback
Since January 31, domestic stocks have collectively lost a staggering Rs 26 lakh crore ($306 billion) in market value at a dollar-rupee exchange rate of 86.58. When factoring in January losses, the total market cap erosion for India in 2025 stands at Rs 45 lakh crore, or roughly $520 billion. This wipeout surpasses the annual GDP forecasts for Malaysia, Norway, the Philippines, or Vietnam. Even India’s neighboring economies, Bangladesh and Pakistan, have lower estimated 2025 GDPs at $481 billion and $393 billion, respectively, according to the International Monetary Fund (IMF).
IPO Limbo
While 44 companies have secured approval from the Securities and Exchange Board of India (SEBI) for their IPOs, most are holding back, deferring their launches to the next quarter or even considering lowering valuations and issue sizes to align with the tough market conditions.
In January, six companies raised approximately Rs 4,845 crore through public issues, a sharp decline from December’s Rs 25,500 crore raised by 15 firms, as per data from Prime Database. February saw a marginal recovery with three companies raising Rs 10,900 crore, of which Hexaware Technologies alone accounted for Rs 8,750 crore. However, with only a few small IPOs lined up in March, market experts remain uncertain about new launches in the coming months.
Retail and HNI Investors Retreat
A significant factor behind the IPO slowdown is the declining interest from retail and high-net-worth individuals (HNIs). This shift became evident when two of the biggest IPOs of the year—Hexaware Technologies and Dr. Agarwal’s Health Care—struggled with poor subscription numbers, except for allocations to qualified institutional buyers (QIBs). Alarmingly, 41 out of 91 newly listed companies in 2024 are currently trading below their IPO price.
Foreign Investors’ Sell-Off Further Weakens Sentiment
Market sentiment has also suffered due to consistent selling by foreign portfolio investors (FPIs) since October 2024, with outflows exceeding Rs 2.7 lakh crore. This has led to a broad decline in stock indices:
Nifty: Down 13% since October 1
Nifty Midcap 150: Down 18%
Nifty Smallcap 250: Down 22%
Moreover, the average time between SEBI approval and IPO launch was 52 days in 2024 (excluding five exceptions). Some major IPOs, such as NSDL’s Rs 3,000 crore issue, have yet to be launched despite receiving SEBI approval in September 2024.
Institutional Investors Turn Cautious
The steep value erosion in the secondary market has also impacted institutional investors, leading to a decline in their net asset value (NAV). Fund managers have become more inward-looking, prioritizing their portfolios over fresh investments. This has affected IPOs and other fundraising activities, such as qualified institutional placements (QIPs), However, with stocks potentially reaching oversold levels, the market could see a revival in fundraising activities within the next four to six months.
Several major IPOs that received SEBI approval in late 2024 are still in limbo. Notable examples include:
Avanse Financial Services (Rs 3,500 crore)
Manjushree Technopack (Rs 3,000 crore)
Ather Energy (Rs 4,500-5,000 crore)
Schloss Bangalore (Leela Palaces, Hotels & Resorts) (Rs 4,500-5,000 crore)
Companies that secured SEBI clearance before December and failed to launch their IPOs by the February 12 deadline are facing additional complications. Some are even considering pulling back entirely, according to industry sources. Only firms with urgent capital needs or those aiming to provide an exit route for existing investors may proceed with IPOs in the current volatile environment.
A Promising Revival in H2 2025?
Despite the current downturn, investment bankers expect a sharp rebound in IPO activity in the second half of 2025. Apart from the 44 companies with SEBI clearance, around 70 more have filed draft prospectuses and are awaiting approval. At least six mega IPOs with issue sizes above Rs 10,000 crore—including Tata Capital, HDB Financials, LG Electronics India, Lenskart, and PhonePe—are expected to hit the market in H2 2025.
Boat Sets Sail Again
While many companies are pressing the brakes on their IPO plans due to market volatility, India’s largest wearables brand, Boat, is gearing up for another attempt at going public. After securing shareholder approval, Boat’s parent company, Imagine Marketing, is set to file a draft prospectus with the Securities and Exchange Board of India (SEBI), marking its second bid for an IPO after withdrawing its first attempt in 2022.
According to filings with the Registrar of Companies (RoC), Boat plans to raise ₹500 crore through a fresh share sale as part of its IPO. The Fireside Ventures-backed company will utilize SEBI’s confidential filing route, similar to Swiggy’s approach before its IPO last year. Sources indicate that Boat aims to raise between ₹2,000 crore and ₹2,500 crore, including a secondary share sale by existing investors, though the final figure will depend on market conditions and the company’s financial performance.
Boat has reportedly appointed ICICI Securities, Goldman Sachs, and Nomura as bankers for the offering, with a target listing in FY26. The company’s previous IPO filing in 2022 sought to raise ₹2,000 crore, comprising ₹900 crore in primary capital and ₹1,100 crore via a secondary sale by private equity firm Warburg Pincus.
Despite its dominance in India’s wearables market, Boat has faced headwinds due to an economic slowdown impacting discretionary spending. In FY24, the company’s revenue dipped 5% to ₹3,285 crore, though it managed to significantly cut losses to ₹70.8 crore. According to research firm IDC, Boat held a 25.7% market share in India’s wearables market in Q4 2024, leading the wireless earphones segment with a 30.5% share.
However, India’s overall wearable device market shrank for the first time in 2024, declining by 11.3%, with smartwatch shipments plummeting 34.4%, while the earwear segment saw modest growth of 3.8%.
Boat is among 20 new-age companies and startups currently evaluating IPO plans. However, given the rough market conditions, many may reconsider their timelines before taking the plunge.
