IPO Market in 9M CY25: Expensive Issues, Halved GMPs, and Softer Listing Gains

That increase in pricing, albeit small, appears to have significantly dampened investor enthusiasm. Unsurprisingly, the average IPO Grey Market Premium (IPO GMP) slumped to just 10.8% of the issue price. This is quite substantial and less than half of the 28.1% premiums observed in the first nine months of 2024.

The informal market has also not been very accurate this year. The difference between the GMP-implied listing price and the actual listing has been 2.8% so far this year, indicating that the majority of the IPOs had subdued listings below expectations. The figure for 9M last year was 1.9%.

Note: IPOs without available GMP are not included in the above calculation.

It comes as no surprise that listing-day gains have also lost their sheen. As per IPOCentral.in, average IPO returns on debut slipped to +11.44%, down sharply from +31.07% a year earlier. While the number of IPOs closing in the red nearly doubled — from 11 in 9M 2024 to 19 in 9M 2025 — the overall upside for investors has become far more muted.

On the other hand, India’s SME IPO market has shown extraordinary resilience and investor appetite in 2025. Between January 1 and September 30, 2025, a total of 183 companies debuted on SME platforms, collectively raising INR 8,620.5 crore.

The year witnessed a balanced growth across NSE Emerge (91 IPOs) and BSE SME (92 IPOs), reflecting a maturing market structure and strong confidence among small- and mid-sized enterprises.

Robust Fundraising and Healthy Listing Gains

• Average issue size: INR 47 crore
• Average listing gain:13.1 % across all issues
• Investor sentiment remained bullish, supported by retail participation and high subscription levels.

o Average oversubscription: 105× overall

o QIB: 57× | HNI (NII): 198× | Retail: 92×

These figures underscore the widening investor base and the increasing credibility of SME listings as a compelling investment avenue.

Sectoral Insights: Manufacturing Leads the Way

The Capital Goods sector dominated the SME IPO space with 43 listings, followed by:

• Services (20)
• Construction (15)
• IT (14)
• FMCG (14)

This sectoral spread reflects India’s manufacturing revival and the growing digitisation trend among smaller enterprises.

Regional Concentration

SME activity remained heavily concentrated in key industrial states:

• Maharashtra (45 IPOs)
• Gujarat (40)
• New Delhi (20)
• West Bengal (20)
• Uttar Pradesh (15)

Together, these five states accounted for nearly 77 % of total listings — reaffirming their leadership as India’s entrepreneurial powerhouses.

Incidentally, global markets are also showing signs of improvement, albeit with some fluctuations in between. A major upset has been the decline of London Stock Exchange in IPO fund raising. In 2006, London raised USD 51 billion, but the figure has declined this year to just USD 248 million. Meanwhile, the US IPO market retained its global leadership with fundraising touching nearly USD 53 billion so far this year.

Disclaimer: This press release is for informational purposes only and does not constitute financial advice.