by From 2021 to 2023, India witnessed an unprecedented surge in Initial Public Offerings (IPOs), marking a historic boom in its capital markets. Fuelled by strong retail participation, abundant global liquidity, favorable government policies, and bullish stock markets, companies across sectors rushed to raise capital through public issues. Startups, tech unicorns, and traditional businesses alike saw this period as an opportune time to tap investor appetite. Over 150 companies went public, collectively raising more than ₹1.8 lakh crore. Notable listings included Zomato, Nykaa, LIC, and Paytm. This IPO frenzy showcased India’s evolving financial landscape, with increased digitization, higher retail participation via apps, and growing confidence in equity markets. However, the boom also brought valuation concerns, regulatory scrutiny, and post-listing volatility.
-
Rise of Tech and Digital Startups
Between 2021 and 2023, India saw a new wave of tech startups entering the public market. Companies like Zomato, Nykaa, PolicyBazaar, and Paytm made headlines by launching high-value IPOs, often crossing billion-dollar valuations. These firms leveraged digital platforms, created new-age customer experiences, and drew substantial investor interest. Most had never posted a profit, yet the promise of long-term scalability and innovation attracted institutional and retail investors. Their IPOs marked a shift in investor mindset—from traditional profit-based metrics to growth-driven potential. Although post-listing performance was mixed, the listings showcased India’s maturing tech ecosystem. The IPO boom gave startups access to public capital and greater visibility, but also brought them under strict regulatory and investor scrutiny, pushing them to improve transparency and accountability in operations.
-
Record-Breaking Fundraising
The IPO boom resulted in record capital mobilization. Companies raised over ₹1.8 lakh crore between 2021 and 2023, with 2021 alone contributing ₹1.18 lakh crore—the highest ever in a calendar year. Traditional giants like LIC (₹21,000 crore) and Adani Wilmar, along with tech-first businesses, led the charge. The availability of liquidity due to low interest rates, recovery from COVID-19 disruptions, and strong secondary market performance created an ideal environment for companies to go public. Many firms used IPO proceeds for debt repayment, expansion, and strengthening their balance sheets. This surge was supported by higher retail and institutional investor participation, reflecting deepening trust in Indian equities. The massive inflow of capital boosted financial markets and supported broader economic recovery. However, valuation concerns and market saturation emerged, prompting more cautious investor behavior toward the end of 2023.
-
Surge in Retail and First-Time Investors
One of the most defining aspects of the IPO boom was the surge in retail investor participation, especially among first-time market entrants. Fueled by digital trading platforms like Zerodha, Groww, Upstox, and widespread financial awareness, millions opened demat accounts. Retail investors eagerly applied for IPOs expecting quick listing gains, often leading to oversubscription by multiple times. SEBI’s reforms and easier online application processes under ASBA (Application Supported by Blocked Amount) also supported the trend. IPOs like Nykaa and Paras Defence saw massive oversubscriptions, largely driven by retail bids. While this enthusiasm democratized investing, many investors lacked long-term strategies and faced losses when newly listed stocks fell below offer prices. The boom highlighted the need for financial literacy and risk education, especially for newcomers. Nonetheless, the period cultivated a strong culture of retail equity participation and reshaped India’s investor demographic landscape.
-
Government and Regulatory Push
The Indian government and SEBI played a pivotal role in enabling the IPO boom. The disinvestment of LIC marked a milestone in India’s economic reforms and attracted millions of first-time investors. Regulatory initiatives such as T+1 settlement, simplified IPO application processes, and digitization of KYC streamlined the IPO participation journey. SEBI also revised disclosure norms, tightened monitoring of book-building processes, and introduced frameworks to enhance transparency. The regulator emphasized investor protection, especially after volatile listings like Paytm. Government-backed reforms to boost startup funding and relax foreign investment norms encouraged unicorns to consider IPOs as a viable fundraising route. Regulatory clarity also allowed for SME and main board IPOs to flourish. Overall, institutional support ensured smoother IPO operations, increased public trust, and strengthened India’s capital market ecosystem for sustainable long-term growth.
-
Post-Listing Performance and Market Volatility
While many IPOs generated hype and heavy oversubscription, their post-listing performance varied widely. Companies like Zomato and Nykaa initially delivered strong listing gains but later faced significant price corrections. Paytm, one of the biggest IPOs, saw its shares crash by over 50% shortly after listing, raising concerns over valuation mismatches and poor earnings visibility. Such volatility created unease among investors, especially retail participants expecting instant returns. Analysts criticized companies for aggressive pricing and lack of consistent profits. The broader market correction in late 2022 and 2023 further impacted investor sentiment. This turbulence highlighted the importance of due diligence, realistic valuation, and long-term business models over hype-driven investment. Regulators and brokerages urged caution and provided more detailed risk disclosures. While IPOs remain an important capital-raising tool, the period emphasized the need for sustainable fundamentals over mere market frenzy. Lessons learned may shape a more disciplined IPO culture going forward.
-
SME IPO Growth and Regional Participation
The IPO boom wasn’t limited to large corporations and tech unicorns—Small and Medium Enterprises (SMEs) also tapped into public markets in unprecedented numbers. Exchanges like NSE Emerge and BSE SME platforms facilitated over 100 SME listings during this period, helping regional businesses access equity capital. Sectors like pharma, manufacturing, textiles, and IT saw mid-sized firms going public. With lower compliance norms, simplified documentation, and localized investor outreach, SME IPOs gained traction across Tier-II and Tier-III cities. Many investors found SME stocks attractive due to niche business models and early-stage growth potential. Retail and HNI investors played a key role in their subscription. However, concerns around low liquidity and price volatility were noted, prompting calls for tighter governance. Still, the SME IPO surge democratized fundraising and created a vibrant entrepreneurial ecosystem at the grassroots level, contributing significantly to employment and regional economic development.
