IPOs in FY26: 75% Mainboard Issues Trade Below List

A record year for fund raising, but returns have cooled

India’s primary market in FY26 has raised unprecedented capital, but the after-market performance of new listings has turned sharply negative. Data cited from Prime Database shows a clear split between record issuance and weak secondary-market outcomes. Nearly three-fourths of companies that listed in FY26 are now trading below their listing price, indicating a broad reversal in sentiment. The shift matters because listing gains have historically been a key driver of retail participation in IPOs. In FY26, the market has delivered more paper losses than quick gains for many investors who bought around listing. Analysts tracking the pattern point to a crowded issuance calendar and pricing that left limited upside after debut. And with volatility in benchmark indices, risk appetite has looked more fragile than in the prior year.

How widespread is the underperformance in mainboard IPOs

Out of 107 mainboard IPOs listed so far in FY26, only 26 are trading above their listing price. The remaining 81 issues, around 75%, are below their debut levels. This is a significant data point because it shows the weakness is not limited to a few stocks or a single sector. It also suggests that listing-day enthusiasm has not translated into sustained demand in the months after debut. The data highlights the challenge for investors who entered at or near listing prices, expecting momentum to continue. Importantly, the underperformance is measured against listing price, not just the issue price, which can make the reversal look starker when initial pops fade.

SME listings show a similar pattern

The SME segment is showing comparable stress. Nearly 74% of SME stocks are trading below their debut price, according to Prime Database data cited in the text. That matters because SME IPOs often attract investors seeking sharper listing gains, but the follow-through has been weak. When performance in both mainboard and SME is under pressure at the same time, it signals that the issue is broader than company-specific disappointment. It also indicates that liquidity after listing may not be deep enough to absorb large volumes of new paper when sentiment turns.

Below issue price: a second layer of damage

A separate comparison to the offer price shows that weakness extends beyond listing price declines. Around 68% of mainboard IPOs and nearly 70% of SME listings are currently trading below their issue price. That implies many investors who got allotment and held on are also underwater. This issue-price comparison is critical because it strips out the listing-day noise and focuses on whether the IPO was priced attractively in the first place. When a majority of new listings trade below the offer price, it raises questions around valuation discipline during pricing and book building.

Big-ticket IPOs led fund raising volumes

FY26 included several large debuts that contributed to the record haul. Major names cited include Tata Capital (₹15,112 crore), HDB Financial (₹12,500 crore), LG Electronics (₹11,605 crore), ICICI Prudential AMC (₹10,602 crore), and Lenskart Solutions (₹7,278 crore). The presence of large offerings also means more capital was required from institutions and retail investors in a relatively short window. For the market, heavy supply can test post-listing demand, particularly when broader risk sentiment is soft.

FY26 fund raising totals: mainboard and SME

FY26 has seen 112 mainboard IPOs raising ₹179,000 crore, described as the highest ever in the provided text. SME issuance also remained strong, with 254 issues mobilising over ₹10,900 crore. Together, these figures capture why analysts have focused on supply pressure as a central explanation. A large pipeline can be healthy for capital formation, but it can also dilute attention and capital across too many deals when market liquidity is finite.

What analysts say is driving the weakness

Uday Patil, executive director at PL Capital, attributed the subdued performance to weak secondary market conditions, valuation overreach, and reduced exposure to Indian equities by foreign institutional investors (FIIs). He also pointed to corrections and volatility in benchmark indices, which can reduce risk appetite for newly listed stocks. Patil added that geopolitical uncertainties have further dented confidence. Another key factor he flagged was the spillover of the FY25 IPO boom into FY26, leading to “too many IPOs chasing limited capital.” This supply-demand mismatch can show up quickly after listing, when marginal buyers are fewer and early investors look to book gains.

Ratiraj Tibrewal, chief executive officer at Choice Capital, highlighted pricing risk, especially in new-age companies. He said weak post-listing performance is largely due to aggressive valuations, with some issues priced on future growth potential rather than current earnings visibility. When earnings visibility is limited, even small shifts in sentiment can compress valuation multiples. That dynamic can be amplified in volatile markets where investors demand a higher margin of safety.

Examples of steep declines cited in the data

The text also includes examples of sharp drawdowns (data as of March 23, 2026, sourced to Prime Database). These examples illustrate how quickly losses can accumulate for some IPO buyers after debut. While the list in the provided text is partial, the figures show declines of around 60% or more for certain names. Such moves can influence broader retail behaviour, including reduced participation in upcoming issues.

FY25 context: momentum was strong, but durability was weaker

The FY26 surge follows strong momentum in FY25, but parts of the broader material included with the prompt point to a similar pattern in the prior calendar year. One FY25 snapshot cited says India saw 108 mainboard IPOs raising ₹183,432 crore, with a median listing gain of 3.8% versus 15.2% in 2024. The same FY25 note stated that while 65% opened at a profit, by year-end 59% were trading below their listing price. This context supports the idea that listing-day demand does not always translate into durable valuations, especially when supply is heavy.

What comes next for the IPO pipeline

Despite the weak aftermarket, expectations in the text are that primary market activity will remain robust, but more measured. Patil said there is a strong IPO pipeline waiting to hit capital markets, but conditions have made it time-sensitive. That suggests issuers and bankers may need to weigh timing, valuations, and market depth more carefully. For investors, the FY26 data reinforces the importance of separating listing-day sentiment from longer-term valuation comfort.

Conclusion

FY26 has delivered record IPO fund raising, yet a large majority of new listings are trading below their listing and issue prices. Analysts have linked the underperformance to heavy supply, elevated valuations, secondary-market volatility, and weaker FII risk appetite. The next phase for the primary market is likely to depend on pricing discipline and how quickly broader market conditions stabilise. The data referenced in the text was current as of March 23, 2026, and the report was first published on March 27, 2026.