Hot Subscription, Dull Listing: IPO euphoria fading on Dalal Street? Expert weighs in

The Indian primary market, previously full of unstoppable excitement, has now begun to exhibit signs of fatigue. The latest pattern of 'hot' IPO subscriptions and 'dull' listings has opened up a significant question for the investors: Has the IPO fever on Dalal Street started to fade?

According to market veteran and equity expert Dilip Bhatt, the dynamics of the IPO market have evolved significantly over the last few years. “Most promoters and investment bankers today are far smarter and more strategic,” Bhatt explains. “Their approach to valuations and timing seems to have changed. They are no longer coming to the market with cheap valuations.”

“Retail and institutional investors have started to play it safer": Bhatt

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According to Bhatt, this shift is reshaping investor behaviour. “Retail and institutional investors have started to play it safer. Instead of aggressively chasing every IPO, many prefer to bid selectively and at comfortable valuations,” he notes. The caution stems from the realisation that not every high-demand IPO guarantees strong post-listing returns.

“People often find it safer to bid at a certain valuation, rather than chasing those same stocks in the secondary market after listing,” Bhatt adds. “The psychology has changed—investors are now looking for stability and reasonable pricing instead of speculative listing gains.”

The chase for quick money

However, the market veteran points out another underlying trend: the chase for quick money. “Many participants still approach IPOs with a short-term mindset. The desire to make quick profits is leading to over-subscription during the bidding phase, but the enthusiasm fades once the stock lists, especially if listing gains don’t meet expectations.”

Overall, the IPO market is maturing. While the subscription numbers may still look impressive, the post-listing performance reflects a more discerning and cautious investor base. Bhatt concluded, “The euphoria may have cooled off, but that’s not necessarily a bad thing. A more balanced and valuation-conscious market is healthier in the long run.”

Market guru Anil Singhvi's take on recent listings

Earlier, Zee Business Managing Editor Anil Singhvi also shared his insights on recent listings. Singhvi highlighted that investors got no listing gains despite strong subscriptions and no follow-up buying from funds post-listing.

For instance, shares of Studds Accessories Limited debuted on Dalal Street at a nearly 3 per cent discount to the issue price recently, while Orkla India Limited stock got listed at a mild premium of nearly 3 per cent over the issue price.

The market analyst also noted that Orkla India's stock fell sharply after listing, and advised investors to keep a stop loss at the IPO price in all listings.