The short
- Global issuance recovered in 2025 with higher deal count and larger sizes; banks expect tech to re-enter the market.
- Day-one listing jumps are lower than the boom years, but float and anchor mix now drive stability more than pop.
- Practical read: discount story risk by sizing to free float and anchor lock-in.
What’s actually changing (quick view)
Two trends underpin the new window. First, issuers are sizing deals larger and courting quality anchor investors to smooth day-two moves. Second, investors demand clearer unit economics and cash flow paths; soft metrics create fragility at listing. Bankers call it “stability over pop” — smaller immediate gains but steadier long-term tradeability.
Market data shows a steady rise in IPO counts and sizes compared with 2024’s lull; professional trackers report hundreds of listings globally through the first three quarters.
Day-1 math: what matters
| Factor | Why it moves price |
|---|---|
| Free float | Tighter float → higher short-term swings; larger float soothes day-2 liquidity risk. |
| Anchor quality & lock-ins | Longer lock-ins from anchors buys time for fundamentals to show through. |
| Retail depth | Retail hype lifts GMP; without institutional backing, pop may be shallow and volatile. |
| Sector heat | Sectors with fresh catalysts (AI, infra, enterprise SaaS) attract allocation bias; beware crowded buckets. |
Recent numbers to keep on the desk
Average first-day returns in 2025 are well below past boom peaks — trackers show single-digit to low-teens averages in many markets so far this year. Treat headline oversubscription as sentiment, not a valuation signal.
In India, trackers list 20+ startup IPOs in various stages and dozens of mainboard filings; local platforms publish day-by-day GMP and subscription reads for real-time colour.
How to read an IPO prospectus for real risk
- Free float vs lock-ins: convert float into likely tradable float after expected settlement; tiny free float with heavy promoter holding = day-2 illiquidity.
- Anchor map: who bought in the anchor book and what are their lock periods? Anchors that lock for 6–12 months meaningfully lower early churn.
- Unit econ reconciliation: reconcile roadshow growth claims with audited cash conversion (OCF) and EBITDA trends.
- Related-party and contingent items: hidden claims can compress enterprise value quickly once public scrutiny begins.
Signals that separate hope from numbers
- True signal: audited cash conversion improving with scale; repeatable unit economics by cohort. (Numbers.)
- Hype signal: sky-high GMP + tiny float + retail frenzy without anchor support. (Hope.)
- Stability cue: anchor investors with long windows and a realistic free float range.
Practical investor checklist
Before subscribing: (a) run simple float math (expected tradable shares), (b) stress test valuations assuming 20% lower revenue growth, (c) check anchor lock durations and promoter pledge levels.
What to watch (next 30 days)
- Anchor announcements and lock-in durations; longer locks = lower early churn.
- GMP vs subscription — if GMP spikes but institutional book is weak, beware.
- Sector flows — are funds rotating into new tech buckets or chasing old winners?
One rule
Rule: Size IPO exposure by expected tradable float, not by headline oversubscription — treat any deal with <10% tradable float as a short-term speculative ticket, not a core buy.