India's primary market experienced unprecedented activity in 2025, but the initial euphoria has given way to a sobering reality check. Of the 103 companies that debuted on the stock exchanges this year, nearly half are now trading below their initial public offering prices, highlighting a significant disconnect between listing-day enthusiasm and sustained investor interest.

Market Performance Overview

The performance data reveals a stark contrast between initial momentum and long-term sustainability. While 69 companies listed above their IPO prices and only 33 opened below, the situation has reversed significantly by year-end.

Record Fundraising Achievement

Despite the mixed post-listing performance, 2025 marked a historic year for equity capital mobilization. Mainboard IPOs raised an unprecedented ₹1.75 lakh crore, representing the highest level of equity capital mobilization on record. Additionally, 267 companies raised ₹11,429 crore on the small and medium enterprises platform, demonstrating robust activity across market segments.

Size Matters: Performance Correlation

A clear pattern has emerged linking IPO size to post-listing performance. The 10 biggest laggards among market debutants have been companies with IPO sizes below ₹1,000 crore, with several stocks declining between 30% and over 50% from their IPO levels.

Notable Underperformers:

Strong Performers:

Conversely, six of the top-performing companies have IPO sizes exceeding ₹1,000 crore. Meesho, which raised ₹5,421 crore, trades over 78% above its issue price. Billionbrains Garage Ventures, Groww's parent company, raised ₹6,632 crore and currently trades 65% above its issue price.

Top Gainers Leading the Pack

Several companies have delivered exceptional returns to investors, demonstrating that quality businesses can sustain premium valuations post-listing.

Market Differentiation and Expert Insights

Market experts note a growing sophistication in investor behavior, with the market increasingly differentiating between quality businesses and hype-driven offerings. Dev Chandrasekhar, partner at Transcendum, observes that many big-name IPOs experienced strong initial enthusiasm but failed to sustain valuations post-listing. Without fresh capital for growth initiatives, these companies must rely entirely on operational improvements to justify premium valuations.

Ganesh Jagdishen, chief executive of Plutus Global, emphasizes that the market is beginning to separate quality from hype. The disconnect between listing gains and sustained performance suggests that market pricing is often driven by sentiment rather than fundamentals. For 2026, the challenge will be identifying the right IPOs for investment, particularly in a rising interest rate environment where growth capital becomes expensive.

In a year marked by market turbulence, the small and medium enterprise (SME) segment has emerged as a beacon of hope for investors. Despite challenging market conditions, 29 SME stocks have defied the odds, delivering stellar returns of over 100% from their initial public offering (IPO) prices.

SME Sector Resilience

The SME sector has demonstrated remarkable resilience in the face of sector-wide struggles. While larger companies have grappled with various economic headwinds, these smaller enterprises have managed to carve out significant growth, rewarding early investors handsomely.

Top Performers

Leading the pack of outperformers is Anondita Medicare, which has registered an impressive gain of over 500% from its IPO price. This extraordinary performance underscores the potential of well-positioned SMEs in niche markets.

Market Implications

The success of these SME stocks amid a challenging market environment highlights several key points:

1. Diversification Opportunities: The SME segment offers investors a chance to diversify their portfolios beyond large-cap stocks.
2. Growth Potential: Smaller companies often have more room for rapid growth compared to their larger counterparts.
3. Market Inefficiencies: The SME market may present opportunities for astute investors to identify undervalued companies.

Investor Caution

While the returns are impressive, it's crucial for investors to approach SME stocks with due diligence. These stocks often come with higher risks, including liquidity concerns and potential volatility.

Looking Ahead

The strong performance of select SME stocks may attract more investor attention to this segment. However, it remains to be seen whether this trend will continue in the face of ongoing market challenges.

Investors are advised to conduct thorough research and consider their risk tolerance before making investment decisions, especially in the dynamic SME sector.