Revival of the IPO Market in New Delhi: A Promising Outlook for 2025
As 2025 unfolds, the Indian primary market is beginning to show signs of revival after a sluggish start. Merchant bankers report that over a dozen companies are preparing to launch their Initial Public Offerings (IPOs) in the next three to six months. This renewed activity is buoyed by a stabilizing secondary market and easing geopolitical tensions, setting the stage for a potentially vibrant IPO landscape.
Companies Preparing for IPOs
Among the notable companies gearing up to tap into the capital markets are HDB Financial Services, a subsidiary of HDFC Bank, and National Securities Depository Ltd (NSDL). Other firms include Kalpataru, Rubicon Research, All Time Plastics, Regreen-Excel EPC India, and Paramesu Biotech. Additionally, financial services firms such as Credila, SK Finance, and Veritas Finance are also looking to launch their IPOs. These companies have already received clearance from the Securities and Exchange Board of India (Sebi), the regulatory body overseeing the market.
The motivation behind these IPOs is clear: companies are mobilizing funds to support capital expenditure requirements, particularly for expansion plans, repayment of borrowings, and general corporate purposes. This proactive approach reflects a growing confidence in the market, despite the challenges faced earlier in the year.
Recent IPO Activity
The recent uptick in IPO activity follows the launch of six public issues last month, including Schloss Bangalore, which owns the luxury hotel chain The Leela. However, it is essential to note that overall IPO activity in 2025 has been slower compared to the previous year. So far, only 16 firms have launched public issues, a significant drop from 29 during the same period in 2024. This slowdown can be attributed to ongoing volatility in the equity market, influenced by a mix of global and domestic factors.
A Look Back at 2024
The year 2024 was remarkable for the Indian IPO market, with 91 maiden public issues collectively raising ₹1.6 lakh crore. This surge was driven by robust retail participation, a resilient economy, and booming private capital expenditure. The contrast with the current year highlights the cautious sentiment prevailing among investors as they navigate uncertainties in both global and domestic markets.
Optimism for the Second Half of 2025
Despite the cautious start to 2025, there are promising signs on the horizon. A growing number of companies are filing documents, and experts anticipate that the second half of the year will witness robust IPO activity. Saahil Kinkhabwala, director of investment banking at Monarch Networth Capital, expressed optimism, stating, "We will see robust activity in the IPO markets in the second half of 2025 as a good set of companies are looking to launch their public issues. There is a good appetite among investors for attractively priced IPOs."
Investor Sentiment and Market Conditions
Panjal Srivastava, partner at Centrum Capital, noted that the sluggish beginning of 2025 reflects cautious investor sentiment amid global economic uncertainties and domestic market volatility. Both issuers and investors are currently adopting a wait-and-watch approach, which is influencing the pace of IPO launches. However, the pipeline remains strong, with 65 companies having received final observations from Sebi and another 65 awaiting final clearance—an essential step before launching public issues.
Conclusion
In summary, while the IPO market in New Delhi has experienced a slow start in 2025, the signs of revival are encouraging. With a robust pipeline of companies preparing to enter the market and a stabilizing economic environment, the second half of the year holds promise for a resurgence in IPO activity. As investor confidence gradually returns, the landscape for public offerings in India is poised for a significant transformation, potentially mirroring the successes of the previous year.