37 Newly Listed Stocks Drop Below Issue Prices – Is the Boom Over?

After outperforming the secondary market in recent years, India's IPO market has struggled to maintain its previous momentum in 2025. Investor appetite for high-risk assets has diminished due to growing concerns that Donald Trump’s trade policies could negatively impact the global economy.

So far this year, most companies raising capital through IPOs have faced tepid demand. Data indicates that retail investor participation—typically strong in SME issues—has significantly declined in recent months, reflecting heightened caution amid market volatility.

A prolonged sell-off in the domestic market has further unnerved investors, eroding billions in wealth and pushing portfolios deep into the red. As a result, many are adopting a wait-and-watch approach before making fresh investments, leading to subdued demand for new IPOs on Dalal Street.

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Over 65% of 2025 IPO Listings Trading Below Issue Price

According to Trendlyne data, 55 companies have successfully listed on Indian exchanges in 2025 following their fundraising efforts. However, 37 of them—accounting for 67%—are currently trading below their issue prices, highlighting weak investor sentiment.

Breaking it down by segment, 6 out of 11 main board listings and 31 out of 44 SME stocks are trading below their IPO prices.

Among individual stocks, GB Logistics Commerce has been the worst performer, currently trading at a 61% discount to its IPO price. Davin Sons Retail and Citichem India follow closely, both down 50% from their issue prices. Additionally, stocks such as Ken Enterprises, Delta Autocorp, Malpani Pipes and Fittings, and 13 others have declined between 20% and 54% from their listing prices.

In March alone, five companies have gone public, but three debuted below their issue prices due to weak investor demand. These IPOs were subscribed only 1-5 times, with limited interest from retail investors. This marks a sharp contrast to 2024, when SME issues saw their retail portions oversubscribed by up to 500 times, with some reaching a staggering 2,000 times.

Post-2024 IPO Boom: What Lies Ahead for 2025?

Analysts at Bajaj Broking note that the IPO market in 2025 has been relatively subdued compared to 2024, primarily due to market volatility, liquidity concerns, and increased regulatory scrutiny. Uncertainties stemming from global geopolitical tensions and fluctuating interest rates have made investors more cautious, while rising bond yields and a tighter monetary environment have further dampened risk appetite.

High valuations have also deterred many companies from going public, fearing tepid investor enthusiasm. Additionally, stricter SEBI regulations on disclosures and pricing have prompted several firms to reassess their IPO timelines.

The brokerage also pointed out that the surge in IPOs in 2024 led to a market saturation effect, making investors more selective in 2025. However, they believe that if market conditions stabilize and interest rates ease, IPO activity could pick up in the latter half of the year.

Despite securing SEBI approvals, many companies have chosen to delay or pause their IPO plans due to market volatility, weak sentiment, and concerns over valuations. With global economic uncertainty, fluctuating interest rates, and industry-specific challenges at play, firms are waiting for more favorable conditions to ensure optimal pricing and stronger investor participation.