Why Large-Sized IPOs See Lukewarm Buying From Retail Investors?

Time after time, big-sized IPOs have shown a very unique performance in India. While the size of these IPOs is huge, their subscription is tepid, and the majority of them record a discount listing as well. Not just that the demand from retail investors has been consistently lukewarm in them.

Top 10 Biggest IPOs Of India:

The biggest IPO of India was worth Rs 27,870 crore, which was launched in October 2024, by Hyundai Motor India. The second and third largest IPOs are of LIC and Paytm, worth Rs 21,008 crore and Rs 18,300 crore, with launch timelines in May 2022 and November 2021.

The latest entrant of big-size IPOs is HDB Financial Services, worth Rs 12,500 crore in June 2025, making it the fifth largest IPO of India as of now.

Data shows that after the Coronavirus pandemic, five of these IPOs could not bag more than 4x subscription.

For instance, Hyundai, although the largest IPO, only witnessed a 2.37 times subscription. LIC had recorded 2.95 times subscription, while NTPC Green Energy and Paytm saw 2.55 times and 1.89 times subscription. Swiggy, a new-age tech company, also has 3.59 times the subscription.

HDB Financial Services is the only IPO after Covid to receive a strong subscription of 16.69x. There is the SBI Cards IPO that was in March 2020; however, it was before Covid, and its subscription was strong by 26.54 times.

Why Are Big-Size IPOs Not Getting Strong Subscriptions?

"Big IPOs often generate strong buzz well before launch, but large size doesn't guarantee listing gains. For instance, LIC's ₹21,000 crore IPO in May 2022 - India's largest-was subscribed nearly 3 times but listed below the issue price. Similarly, Paytm's ₹18,300 crore IPO in November 2021 saw poor subscription and sharp post-listing decline, despite heavy pre-IPO hype," said Krishna Patwari, Founder & Managing Director of Wealth Wisdom India, to GoodReturns.

"This is common with large or new-age companies where IPOs are aggressively priced, leaving little room for upside," he told us.

Big Size IPOs Struggling In Retail Category:

Retail individual investors (RIIs) are those investors who will not invest more than Rs 2 lakh in an IPO.

As per the market data, these investors have been hesitant to bid for large-sized IPOs. For instance, Hyundai's retail category portion was subscribed by just 0.5x, while LIC and Paytm saw 1.99 times and 1.66 times subscriptions. Swiggy struggled too with 1.41 times subscriptions.

Even HDB Financials, whose IPO is the best performing post-COVID, saw only 1.41 times subscriptions in the retail category.

"If valuations aren't supported by strong fundamentals or clear growth visibility, investor interest fades quickly - especially in uncertain market conditions. Moreover, large IPOs come with huge share supply. Most applicants - including retail, HNIs, and institutions - tend to get allotments," Patwari added.

What was common among these large-sized IPOs? It is the qualified institutional buyers (QIBs) who are FIIs, FPIs, banks, mutual funds and other financial institutions, who have shown strong demand and pushed these IPOs to full subscription.

Listing Of Top 10 IPOs:

On listing day, the expert said, many become sellers aiming for quick gains, creating a supply overhang in the secondary market that suppresses price movement. Ultimately, the success of large IPOs will hinge more on reasonable valuations, consistent profitability, and business strength than just size or hype.

5 out of these top 10 IPOs have listed at a discount. HDB Financial Services will list on BSE and NSE next week. A double-digit premium listing was seen in Coal India and Reliance Power, which are decades-old IPOs. Post-COVID, Swiggy is the only one to manage a single-digit 7.7% premium listing.

Going ahead, a host of large-sized IPOs are likely to open in 2025, with one of them expected to break the record of Hyundai to become the newest and mother of all IPOs in India. It is expected that a Reliance Jio or Tata Group-backed company has the potential to launch India's largest IPO.

"Strong fundamentals-not sentiment alone-are key to sustainable post-listing performance," the expert said.

According to the Q1 2025 IPO Trends Report by EY, India's Initial Public Offering (IPO) market continues to demonstrate resilience, securing a 22% share of global IPO activity in the first quarter of 2025. With 62 IPOs raising a total of US$ 2.8 billion, India remains a leading destination for companies seeking to go public, even amidst a backdrop of global market uncertainties.

The EY report highlights that the IPO landscape in India remains diverse, with significant activity across sectors such as Industrials, Real Estate, Hospitality & Construction, and Health & Life Sciences.

India's dynamic stock market, coupled with favourable economic indicators, continues to bolster investor confidence. The growing participation of retail investors is evident, as the market adapts to shifting dynamics and investor preferences, EY report said.