Blasé Capital CYCLES & SEASONS

Like in other sectors, seasons repeat in stocks, even as cycles provide crucial lessons. This helps explain why India’s IPO (Initial Public Offering) market in 2025 was relentlessly crowded, and the early signals in 2026 suggest one that is open but noticeably selective. In 2025, India recorded one of its most active years for public listings. According to data by PRIME Database, there were 373 IPOs, which raised close to INR1.95 trillion. Just over 100 of these were mainboard IPOs, and accounted for nearly INR1.76 trillion.

Although the listings were spread across quarters, there were weeks when investors needed to evaluate multiple offerings. Financial services emerged as the single largest contributor to the fundraising, and accounted for 26-27 per cent of the amount raised. Consumer-facing businesses, including new-age tech platforms, discretionary brands, and Internet-led models, formed the second large block. Industrials and manufacturing-linked firms added to the values, particularly through SME listings. What made 2025 feel like a season of IPOs was not merely the numbers but the similarities. Growth narratives dominated, as firms spoke about scale and penetration, operational leverage, and order books and capex cycles.

Market data that track the IPOs indicated that nearly two-thirds of the issues listed at premiums to offer prices, but the magnitude of the gains was far lower than in the earlier boom years. More importantly, the bulk of the IPOs in 2025 traded below their listing prices within months, and a significant number slipped below the offer prices. As of late December 2025, post-listing performances showed that less than half of the mainboard IPOs traded above the issue prices, though more had listed with gains.

Listing-day fireworks, as mentioned above, cooled down. PRIME Database data shows that the average listing gains fell to about 10 per cent in 2025, down to a third of about 30 per cent in 2024. Only 36 per cent of the IPOs delivered more than 10 per cent on debut, a sharp drop from the previous year. Three broad patterns emerged in 2025, which cut across sectors. The first pattern was the compounding operator. These were businesses without valuation stretches, often with visible cash flows or credible paths to profitability. Their listings were not dramatic, but their prices held on within narrow ranges, and did not collapse.

Capillary Technologies for instance, gained more than Rs 100 to go beyond INR730, before settling at INR615 yesterday, after a series of ups and downs over the months. Smartworks Coworking started its journey from INR445 in July 2025, went beyond INR600, and seemed settled at around INR445 yesterday. It entered the market with a profitability narrative anchored in enterprise demand. At every high, including the initial one, the stock faced a selling pressure, which brought the price to either around the INR500 or INR450 marks.

The second pattern was liquidity. A notable feature of 2025 was the dominance of offers for sale (OFS) by the promoters, founders, and existing shareholders. Fortune India magazine reported that nearly two thirds of the overall funds raised were via OFS, and amounted to INR97,000 crore, which made last year one of the most exit-of-the shareholders-heavy years. Pine Labs was heavily skewed towards OFS, but listed at a premium of nearly 10 per cent. This showed that markets were comfortable absorbing the exit-driven supply. Urban Company was an OFS-heavy listing, and opened more than 50 per cent above its issue price, one of the best yearly debuts.

Another pattern was of the IPOs that attracted reasonable demand, delivered first-day gains, and then traded lower. Excelsoft Technologies listed with a positive premium in November 2025, but the stock nosedived by nearly 40 per cent relative to its debut. VMS TMT, despite listing higher than its offer price in September 2025, traded more than 50 per cent below the list price a few weeks later. IndiQube Spaces, a workspace tech firm, saw its stock price weaken by over 20 per cent below its listing price within months.

What is notable is that these patterns did not align neatly with the sectors. Instead, they seem to be linked to capital discipline. Investors focused less on the nature and future of the industry, and more on how the firms intended to use the capital, how long the operational and financial runway extended beyond the IPOs, and how dependent they were on favourable market conditions. This helps explain why 2026, despite a slowdown in IPOs due to the wayward and wild indices, feels selective.

There are several big names that hope to tap the markets in the future. Merchant bankers speak of a strong 2026. A foreign news agency reported that the IPOs this year may raise funds in the $25-27 billion range. So, what may change is not the ambition and enthusiasm of the issuers, but the posture of the stock markets. After a year when the IPO supply was constant, but outcomes uneven, investors appear to be guarded and cautious. They may no longer jump to join the IPO bandwagon. Price bands, offer sizes, and capital structures may be examined closely in 2026. If 2025 was about how IPOs behave in a season, 2026 may show how investors behave once they start thinking in terms of stock cycles.