IPO Performance Over Last Six Years Remains Patchy

Nearly half of the companies that went public in the past six years are still trading below their issue price. This is despite a long stretch of strong equity markets and heavy retail participation in IPOs. Data compiled by Axis Capital shows that about 180 of the 374 companies listed since July 2020 remain in the red for investors who bought at the offer price.

The numbers underline a gap between the strong demand seen during IPO launches and the reality of returns after listing. They also arrive at a time when the primary market is again picking up pace, with several large and mid-sized issuers lining up offerings.

Extent Of Post-Listing Losses

The stress is not limited to marginal declines. Around 70 companies, or close to 19% of the total, are trading 25 to 50% below their offer price. Another 34 stocks, about 9%, have lost more than half their value since listing.

These sharp drawdowns stand out because many of these names had seen strong subscription numbers at the time of their IPOs. Several were launched during periods when broader markets were supportive, and liquidity was ample. Note that losses are spread across other brackets as well. The report found:

• About 50 companies are now trading 10 to 25% below the issue price

• Another 26 companies are down by up to 10%

Taken together, the data show that underperformance has persisted well beyond the initial listing phase for a large section of the IPO universe.

Not All Listings Have Disappointed

While the number of loss-making IPOs is large, the picture is not one-sided. Around 194 of the 374 companies covered in the report are still trading above their issue price. That works out to a little over half of all listings during the period.

However, gains are unevenly distributed. Axis Capital’s data shows that returns for IPO investors have been driven by a relatively small set of strong performers. As many as 57 companies are trading more than 100% above their issue price. Another 44 companies have gained between 50 and 100% since listing.

Wide Time Frame, Mixed Market Conditions

The Axis Capital study covers mainboard IPOs and follow-on public offers listed between July 2020 and January 2026. In total, it tracks 374 companies across very different market phases.

This period includes the sharp rebound after the pandemic-led sell-off, a strong bull run in equities, phases of correction, and stretches of higher volatility driven by global and domestic factors. The mix allows for a broader view of how new listings have fared once the early excitement faded.

Despite the favourable backdrop during parts of this time, the data shows that market conditions alone did not guarantee sustained gains for IPO investors.

Lessons For Investors

The data also throws up some clear lessons for investors who are preparing for the next wave of IPOs. One, strong subscription figures do not protect against losses after listing. Many of the stocks trading significantly below the issue price had seen heavy demand during their offers. That suggests oversubscription can reflect short-term liquidity and sentiment, not long-term business strength.

Two, valuation matters more once the lock-in period ends and quarterly numbers start coming in. Companies that were priced aggressively have struggled to hold up when growth slowed, or margins came under pressure.

Three, returns have been highly uneven, with a small set of winners driving most of the gains. This means betting blindly on every IPO has not worked. Investors who studied balance sheets, cash flows, and sector positioning appear to have done better than those chasing listing-day pops.

Sources:

Zeebiz

ANI