Nitin Kamath, founder of Zerodha, noted that India's primary market maintains high activity despite the broader stock market facing challenges in gaining momentum. Offerings such as IPOs, Offer for Sale (OFS), and Follow-on Public Offers (FPO) are attracting strong investor interest.
In a LinkedIn post, Kamath stated that the volume of funds raised through the primary market this year already matches or exceeds the figures from the previous two years. He also pointed out that the presence of many companies preparing to go public could further boost this momentum.
Kamath emphasized: 'While the broader markets are not showing movement, the primary market (IPO, OFS, and FPO) is very active. In terms of capital raised this year, we are already on track to match, if not exceed, the figures of the last two years. And there is a large pipeline of IPOs ahead.'
This excitement around IPOs is also reflected on the Zerodha platform. Kamath added that the brokerage firm has recorded a sharp increase in IPO applications, including instances where users opened accounts solely to participate in public offerings.
However, Kamath warned that high demand does not always guarantee significant returns for investors. Analyzing IPO listing data, he highlighted the difficulty of consistently achieving substantial returns from new listings. Although 74–80% of IPOs opened above the issue price, 'a significant portion of them did not yield impressive profits.'
He continued by noting that in the last period, 35% of IPOs opened only 0–10% above the issue price, and about 26% opened below it. Furthermore, Kamath pointed out another issue for retail investors—the possibility of getting an allocation at all. He explained: 'By the way, one thing this chart doesn't show is that the more popular the IPO, the lower your chances of getting an allocation.'
The primary market is expected to remain busy in the coming months. Companies named as potential public market entrants include Jio Platforms, PhonePe, Razorpay, and NSE. Earlier this year, Shiprocket and Tata Capital debuted in the market, contributing to the Indian primary market becoming significantly more active compared to the overall stock market.