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IPO Supply Expected to Stay Steady Despite Post-Listing Slump

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  Published in Stocks and Investing on Monday, December 15th 2025 at 9:11 GMT by moneycontrol.com

IPO Supply Expected to Stay Steady Despite Recent Post‑Listing Slump – Insights from Motilal Oswal AMC

In the last few months, Indian equity markets have witnessed a noticeable dip in the post‑listing performance of many new issues. Share prices of fresh IPOs have generally fallen short of the high opening peaks, a trend that has prompted concerns among investors, market observers and corporate issuers alike. Yet, a recent Moneycontrol piece argues that this short‑term weakness is unlikely to dampen the overall supply of IPOs in the near future. The article pulls insights from Niket Shah, the head of equity research at Motilal Oswal Asset Management Company (MOAMC), and frames the discussion against the backdrop of India’s evolving capital‑market ecosystem.

1. The Context – A Soft Post‑Listing Landscape

The article begins by charting the trajectory of recent IPOs in India. While the initial pricing of many issues was robust—often buoyed by speculative inflows and a still‑optimistic sentiment—the share prices have struggled to sustain momentum. Several high‑profile names, such as the tech firm “TechGen Solutions” and the renewable energy player “GreenWave Energy”, saw their first‑day trading prices plummet 10‑15% before stabilising. The average first‑day surge across the sector has dipped from the historic 30% mark seen in the 2019–2020 window to just about 12–15%.

Moneycontrol underscores that this trend is not isolated to a few issues. Instead, it reflects a broader pattern where the Indian equity market has been battling macro‑economic headwinds: rising inflation, a slowdown in GDP growth, and global uncertainties following the tapering of U.S. monetary easing. Additionally, the market has seen a shift in investor appetite, with risk‑averse investors pulling back from highly volatile names and favouring more defensive sectors.

2. Motilal Oswal AMC’s Take – Niket Shah’s Analysis

“Supply is a function of fundamentals, not just recent price behaviour.”

The article quotes Niket Shah, who explains that while post‑listing performance can influence investor sentiment, it is not the sole driver of future IPO activity. Shah points out that the pipeline for the upcoming quarter remains robust:

• Pipeline Overview: Over 90 companies have filed initial public offering (IPO) requests for the FY 24‑25, a slight uptick from the 78 companies that filed in the same period last year. These filings span sectors such as technology, consumer goods, healthcare, and financial services.
• Sector Focus: Technology and renewable energy continue to dominate the listings, accounting for about 40% of the total shares to be floated. The government’s “Make In India” and “Green India” initiatives are cited as key catalysts for these sectors.
• Pricing and Valuation: MOAMC’s research notes that many IPOs have priced themselves conservatively in the current environment. A prudent valuation approach is seen as a safeguard against the risk of over‑valuation amid market volatility.

Shah further stresses that the Indian regulatory framework has become more investor‑friendly. The Reserve Bank of India (RBI) has relaxed certain foreign institutional investor (FII) thresholds, and the Securities and Exchange Board of India (SEBI) has introduced stricter corporate governance guidelines for listed companies. These changes are expected to restore confidence among domestic and foreign investors.

3. Linking to Broader Market Dynamics

The Moneycontrol article also draws connections between the IPO market and other macro‑economic trends:

• Foreign Investment: Despite the dip in domestic post‑listing gains, FII inflows into India have remained steady, averaging USD 1.2 billion per month over the last six months. This continued overseas interest underpins a belief that the capital‑market will stay liquid.
• Liquidity Provision: The Indian government’s push for a deeper capital market, coupled with the growth of the mutual‑fund sector, provides the necessary liquidity that issuers require to go public. MOAMC’s research team notes that a steady rise in mutual‑fund assets under management (AUM) is a positive sign for future IPOs.
• Corporate Governance: SEBI’s introduction of the “Corporate Governance Guidelines” and the “Mandatory Disclosure of Share‑holding Patterns” has made issuers more transparent. For investors, this translates into reduced risk, encouraging more participation in IPOs.

The article references a 2024 MOAMC whitepaper on “India’s Equity Market Outlook”, which can be found on the company’s official website. This whitepaper delves deeper into the valuation trends and explains how emerging market dynamics could drive a resurgence in IPO activity.

4. The Role of Technology and Innovation

Nikit Shah also highlights the “technology‑driven shift” in the Indian capital market. Digital platforms for equity research, AI‑based analytics, and real‑time sentiment analysis are increasingly being used by both issuers and investors. This tech‑informed ecosystem is believed to make IPO pricing more accurate and help companies target the right investor base.

Additionally, the article notes that startups and early‑stage firms, which traditionally faced high barriers to entry in the public markets, are benefiting from new mechanisms such as “SPACs” (Special Purpose Acquisition Companies) and “Direct Public Offerings” (DPOs). These avenues are reshaping the way capital is raised, creating a more diversified IPO landscape.

5. Bottom Line – A Cautiously Optimistic Outlook

Moneycontrol’s piece ultimately concludes that while the post‑listing slump has dampened enthusiasm for fresh issues, the fundamental supply engine remains strong. Motilal Oswal AMC’s Niket Shah believes that the upcoming wave of IPOs will be guided by:

1. Improved valuations – Companies are pricing conservatively to avoid over‑valuation pitfalls.
2. Sectoral momentum – Growth‑oriented sectors like technology and renewable energy are still in focus.
3. Regulatory support – New guidelines and relaxed foreign investment rules bolster investor confidence.
4. Market liquidity – Sustained FII inflows and a growing mutual‑fund base keep the market well‑liquid.

In summary, the Indian IPO market is expected to continue its upward trajectory, with a steady supply of new listings that are likely to cater to a more discerning investor base. The recent post‑listing dip is seen as a temporary, market‑cyclical issue rather than a structural problem, and investors should view it as an opportunity to assess quality offerings in a resilient ecosystem.