The IPO Hangover: Once ‘Hot’ Issues Now Trading Up to 51% Below Offer Price

From grey market frenzy to grim reality — after India’s IPO boom, retail investors are nursing losses while promoters cashed out at peak valuations

The champagne has gone flat in many IPOs. Twenty-three initial public offerings that dominated headlines during India’s 2024-25 IPO boom are now trading below their issue prices, some down as much as 51%. The gap between market euphoria and fundamental value is widened.

Concord Enviro, which listed with much fanfare, has lost half its value. Jaro Institute, marketed as an education sector play, is down 50%. VMS TMT has shed 48.6%, while Oswal Pumps and Ganesh Consumer Products have both dropped over 41%. Even larger names like Afcons Infrastructure and NTPC Green Energy are nursing losses of 30% and 17% respectively.

During the boom, many of these companies were aggressively marketed, and some even heavily oversubscribed. Retail investors, caught up in the frenzy of grey market premiums and analyst projections, queued up for allocations. Today, many are sitting on substantial paper losses.

When Oversubscription Meant Nothing

Take Seshaasai Technologies. The issue was oversubscribed multiple times, with retail investors scrambling for shares. Today, it trades 40.9% below the offer price. Or consider Dam Capital, an investment banking firm that went public—down 40.4%. Regaal Resources, another heavily promoted issue, has lost 40.6%.

The renewable energy theme, which attracted significant investor interest, has been particularly bruising. Vikram Solar is down 33.8%, Solarworld Energy has lost 39.9%, and ACME Solar Holdings is trading 20.1% below issue price. Even NTPC Green Energy, backed by a government pedigree, could not escape the correction, down 17%.

Consumer-facing businesses fared no better. Bluestone Jewellery, positioned as the digital jewelry retailer for the new India, is down 19.1%. Orkla India, the foods play, has shed 24.9%. Patel Retail and Gem Aromatics are both trading well below their listing prices.

The Grey Market Premium Illusion

Grey market premiums—the unofficial trading of shares before listing—often create a self-fulfilling momentum. A substantial premium signals strong demand, which in turn attracts more retail applications, driving oversubscription numbers that get breathlessly reported in the media. This can help IPOs garner heavy subscriptions and deliver listing day pops that make for great headlines.

One Mobikwik, the fintech platform delivered a decent opening but is now down 22.5% from the issue price. International Gemmological Institute listed with fanfare but trades 20.7% lower today.

The problem is what happens after the listing pop fades. Grey market premiums and first-day gains say nothing about long-term value creation. They are mere short-term sentiment indicators in a moment of peak liquidity, not fundamental analysis of business quality, earnings trajectory, or valuation reasonableness.

Anchor Investors: No Crystal Ball Either

The presence of marquee anchor investors is often marketed as validation of an IPO’s quality. Investment bankers highlight the list of domestic mutual funds, foreign institutions, and insurance companies that have committed capital at the anchor stage, creating an aura of credibility.

But anchor investors don’t guarantee long-term success either. Their motivations vary—some are genuinely bullish, others are relationship-driven allocations, and many are simply looking for listing gains or short-term momentum. Anchor lock-in periods are typically just 90 days for half the allocation and 180 days for the rest. After that, they’re free to exit.

Several of the 23 IPOs now trading below issue price had strong anchor books. It didn’t matter. Once the lock-in expired and market sentiment shifted, even institutional money started looking for exits. Retail investors, who applied based on the comfort of seeing big names in the anchor list, too, were left holding depreciated paper.

The hard truth is that anchor investors don’t have special insight into how a company will perform over three to five years. They’re making short-term allocation decisions in a competitive environment where declining participation in hot IPOs means missing out on relationship equity with bankers and issuers.

Who Actually Won?

In retrospect, the IPO boom benefited a specific set of stakeholders. Promoters raised capital or partially exited at peak valuations—the best possible outcome for them. Lead managers and investment bankers earned hefty underwriting fees. Intermediaries and advisors collected their commissions. Some early institutional investors who got in through pre-IPO rounds and exited at or near listing made their returns.

Long-term retail investors who applied for allocations, held through the listing, and stayed invested? Not so much. Indo Farm Equipment is down 31.8%. Ellenbarrie Industrial Gases has lost 36.4%. JSW Cement, despite the group’s reputation, is trading 15.6% below issue price.

The boom period, as it turns out, was the best exit window for those already inside the tent. When liquidity is abundant, even average businesses can be dressed up and marketed as extraordinary growth stories. Narratives around “India’s rising middle class,” “energy transition,” or “digital transformation” obscure the fact that many of these companies had stretched valuations, modest growth rates.

When Liquidity Tightens, Reality Returns

The correction in these 23 IPOs coincides with a broader tightening in market liquidity and a shift in investor sentiment. Foreign institutional investors, who were net buyers during the boom, turned cautious. Retail investors, burned by losses, became more selective.

Of course, not all these companies are bad businesses. Some may well recover as they execute on their plans and deliver earnings growth. But the starting valuations were too high. Investors paid for perfection at the peak and are now repricing for reality.

Lessons

Oversubscription numbers are not signals of undervaluation. Narratives about sectoral tailwinds or growth potential are not substitutes for actual earnings quality, cash generation, and reasonable valuations.

Grey market premiums create excitement but do not predict long-term wealth creation. Anchor investor participation provides some credibility but isn’t a guarantee of future performance. And boom periods, by definition, are when the greatest amount of capital gets allocated to the weakest opportunities.

The data speaks clearly: during euphoric markets, promoters and intermediaries win. In the aftermath, when prices align with fundamentals, it’s retail investors left nursing the losses. The “fancy” IPOs, the “must-have” allocations, the “once-in-a-lifetime” opportunities—most turned out to be expensive lessons in market timing and valuation discipline.