But capital raised is only an input metric. For investors, the true test lies in the output: returns.

Measured from offer price to current market price, the median return across all 344 IPOs is 0%. In other words, half of the companies that listed over the past year are now trading below their issue price.

Listing-day illusion

At first glance, the listing-day data appears reassuring. Around 64% of IPOs debuted above their offer price, suggesting healthy demand and strong investor sentiment. But this optimism fades with time. Only 50% of these stocks remain above their issue price today.

A closer look explains why. Of the 344 IPOs, 40% listed above their offer price and continue to trade in positive territory. Another 23% also listed at a premium but have since slipped below their issue price, wiping out early gains for investors who stayed invested.

On the other side, just 6% listed below their offer price but later recovered into positive territory—rare turnarounds in an unforgiving market. The remaining 27% listed flat or below their offer price and remain underwater.

Nearly a quarter of IPOs that created a favourable first impression ultimately disappointed. A listing-day pop, it turns out, offers little insight into what follows.

Return extremes

The return profile of these IPOs does not resemble a bell curve clustered around modest gains. Instead, it looks like a barbell.

At one extreme, a small group of standout performers delivered returns exceeding 100%, with the top performer rising more than 400%. At the other end sits a sizeable cohort of stocks down between 50% and 80%. What is striking is the absence of a large middle—few IPOs delivered steady, moderate gains of 10–30%.

This skew explains why the mean return stands at +14%. A handful of exceptional winners lift the average, masking the fact that outcomes are highly dispersed. IPOs are not a uniform asset class offering predictable short-term gains; they produce a wide range of results, from spectacular successes to deep losses.

Crowded calendars

Timing adds another layer to the analysis. IPOs that listed in the first half of 2025 have, on average, performed better than those that came later in the year. The September–November period saw the heaviest issuance, with 68% of the year’s IPOs crowding into the second half—and also delivering the weakest subsequent performance.

This pattern is hardly surprising. When issuance volumes surge, quality tends to dilute. Promoters and bankers, sensing favourable market conditions, rush deals to market. Companies that might have waited another year for stronger fundamentals are pushed forward. Price discovery suffers when investor attention is stretched across dozens of simultaneous offerings.

Peak supply often coincides with peak optimism—and that combination rarely works in favour of buyers.

Investor discipline

What, then, should investors take away from this data?

First, selection matters far more than participation. The popular strategy of applying to every IPO in search of quick listing gains is a losing proposition in aggregate. The odds of positive returns—even over the short term—are little better than a coin toss.

Second, IPOs deserve the same analytical rigour as any secondary-market investment. An IPO is not a lottery ticket; it is an equity purchase at a price determined by parties whose incentives differ from those of incoming shareholders. Investors must examine the business model, competitive position, use of proceeds, promoter track record and, critically, valuation relative to listed peers.

Third, volatility is unavoidable. Newly listed stocks lack price history, making post-listing movements unpredictable. Even strong businesses can experience sharp drawdowns before stabilising.

There is also a simpler, often under-appreciated option: waiting. Allow the company to report a few quarters of results as a listed entity. Observe whether management delivers on the promises made in the prospectus. The entry price may be higher—or lower—but the information gap narrows significantly. Missing the first few months of trading is far less costly than misjudging the business altogether.

The IPO market will remain active, and capital will continue to flow. The real question is whether that capital creates wealth or merely transfers it. As always, the answer lies in selection.

Anoop Vijaykumar, fund manager and head of equity at Capitalmind AMC