Zerodha founder says India’s IPO market remains 'red hot' with mixed listing gains

Primary market activity outpaces broader equity trends

According to YourStory, Zerodha founder Nithin Kamath has characterised India’s primary market as “red hot,” despite a lack of momentum in the broader equity market. The observation covers IPOs, Offer for Sale (OFS), and Follow-on Public Offers (FPOs), all of which have attracted strong investor interest this year.

Kamath noted in a LinkedIn post that the capital raised through these instruments is already on pace to match or exceed the totals from the previous two years. He also highlighted a robust pipeline of companies preparing to go public, which could sustain the momentum.

Surge in IPO applications and new accounts

Zerodha’s platform has experienced a sharp increase in IPO applications, including users opening new accounts specifically to participate in public offerings. Kamath shared that this trend reflects broader retail investor enthusiasm for primary market opportunities.

Mixed listing performance and allotment challenges

Despite the strong demand, Kamath pointed out that listing performance has been inconsistent. While 74–80% of IPOs opened above their issue price, a significant portion delivered only modest gains. Specifically, 35% of recent IPOs listed just 0–10% above their issue price, and around 26% listed below it.

He also highlighted a structural challenge for retail investors: popular IPOs often have low allotment odds, reducing the likelihood of securing shares at the issue price. This dynamic could influence investor behaviour and demand for alternative investment options.

Pipeline of upcoming IPOs

The primary market is expected to remain active in the coming months, with high-profile companies like Jio Platforms, PhonePe, Razorpay, and the National Stock Exchange (NSE) reportedly preparing to tap public markets. Earlier in the year, Shiprocket and Tata Capital made their market debuts, contributing to the sustained activity.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

Kamath’s observations signal a disconnect between the primary and secondary markets in India. For founders and operators, this is a double-edged signal. On one hand, a buoyant IPO market suggests that investor appetite for new listings remains strong, which could make it easier for well-prepared companies to raise capital or offer exits to early backers. On the other hand, the mixed listing performance—where a significant portion of IPOs either underperform or deliver only marginal gains—highlights the risks of overestimating demand or timing.

For retail-focused startups or platforms, the surge in account openings specifically for IPO participation could indicate a growing base of first-time investors entering the market. This demographic may be more receptive to education, tools, or products that simplify IPO investing or diversify risk. Meanwhile, founders eyeing an IPO should weigh the low allotment odds for retail investors against the benefits of broader public participation.

Key takeaways

• A strong IPO pipeline suggests continued opportunities for capital raising, but listing performance varies widely.
• Founders should assess whether their company’s growth story aligns with investor expectations in a competitive IPO market.
• The rise in new accounts for IPO participation may create opportunities for startups offering investor education or alternative investment products.
• Low allotment odds in popular IPOs could push retail investors toward secondary markets or alternative assets, impacting demand dynamics.