Indian equities may be struggling to find a durable bid, but the IPO market is telling a very different story. Zerodha co-founder and chief executive Nithin Kamath on Tuesday described the primary market as the "only bullish corner" of the market, pointing to a sharp contrast between weak secondary-market performance and robust demand for new listings.
According to data Kamath cited, 67.2% of 125 initial public offerings listed between October 2025 and September 2026 were trading above their issue prices. The median return across those listings stood at 24.7%, a figure that suggests the average investor who secured allotment and held through listing has fared materially better than participants in the broader equity market. The numbers capture a familiar but increasingly pronounced trend in India: when sentiment turns cautious on large-cap and mid-cap stocks, fresh paper can still attract strong interest from institutions and retail investors alike.
IPOs Defy Weak Markets
The divergence is notable because it comes at a time when Indian equities have remained under pressure from a mix of domestic and global factors, including valuation concerns, uneven earnings momentum, and persistent caution around risk assets. In such an environment, IPOs often benefit from a scarcity premium. Investors looking for growth stories, differentiated business models, or near-term listing pops tend to crowd into new issues even when they are less enthusiastic about the broader market.
Kamath's comments also reflect a deeper structural feature of India's capital markets. The country's IPO pipeline has expanded rapidly in recent years, supported by a large base of retail participation, abundant domestic liquidity, and a steady flow of private companies seeking public-market valuations. That has turned the mainboard IPO segment into one of the most closely watched barometers of investor risk appetite.
But the strong listing performance does not necessarily mean the market is broadly healthy. In many cases, IPO gains are driven by limited float, aggressive demand at the offer stage, and a willingness among investors to pay up for new narratives. That can produce impressive short-term returns without guaranteeing sustained post-listing performance. For policymakers and market participants, the split between IPO enthusiasm and secondary-market weakness is a reminder that capital formation can remain active even when confidence in existing equities is fragile.
What The Data Suggests
The 67.2% success rate cited by Kamath is significant not only for what it says about recent listings, but also for what it implies about investor behavior. A median return of 24.7% indicates that gains have not been confined to a handful of blockbuster debuts; rather, positive pricing has been broad enough to lift the central tendency of the cohort. That breadth suggests an environment in which demand is not merely speculative, but still anchored in a willingness to allocate capital to new issuers.
At the same time, the data should be read carefully. IPO performance is highly sensitive to market cycles, issue pricing, and sector composition. A strong run of listings can reverse quickly if broader liquidity conditions tighten or if post-listing earnings fail to justify valuations. The current strength in the primary market may therefore be less a sign of broad-based optimism than a reflection of selective enthusiasm in a market where investors are still willing to chase fresh opportunities.
For India's market ecosystem, the message is mixed. The IPO boom supports fundraising, deepens participation, and broadens the public market. Yet it also raises questions about whether capital is being deployed more aggressively into new issues than into established companies whose valuations have already corrected. If that imbalance persists, the market could continue to reward issuance even as the underlying equity landscape remains subdued.
A Split Market Mood
Kamath's framing captures the mood succinctly: one part of the market is still partying, even as the rest remains subdued. For investors, that split demands discipline. Listing gains can be attractive, but they are not a substitute for fundamentals, and they do not necessarily signal a durable turn in market sentiment.
For now, the IPO market appears to be doing what weak secondary markets often cannot: offering a clear narrative, a fresh entry point, and the possibility of quick gains. Whether that strength can endure will depend on the broader trajectory of Indian equities, interest rates, earnings growth, and investor risk tolerance in the months ahead.