From old economy to niche players, the IPO market is different, healthier

The SME segment, in particular, has witnessed a relentless run, unerscoring highlighting a growing appetite for smaller, niche businesses
| Photo Credit:
Artem Kniaz

The Indian primary market has been buzzing in recent years, emerging as one of the most active IPO markets globally, with the number of issues crossing 350 annually. Both the mainboard and SME segments have attracted a growing pool of companies and investors.

Traditionally, IPO activity tends to peak when the secondary market is thriving and benchmark indices are scaling new highs. But this cycle has been different. Even as the Nifty and Sensex have largely moved sideways, there has been little let-up in primary-market activity. The SME segment, in particular, has witnessed a relentless run, unerscoring a growing appetite for smaller, niche businesses.

Industrial players

Old-economy sectors — traditional industries with roots in the Industrial Revolution, centred on physical goods, heavy manufacturing and manual labour — are making a strong return to the capital markets. In earlier years, IPOs tended to chase whichever theme was in vogue at the time — IT, telecom, infrastructure or financial services. This cycle is different: companies spanning steel and coal, textiles, power, recycling and metals are all increasingly finding their way to the market.

For instance, several old-economy players have tapped the market, including Lumino Industries, Annu Projects and Laser Power & Infra (EPC); Kusumgar and Aastha Spintex (textiles); Ardee Industries (metal recycling); Indo-MIM and Hy-Tech Engineers (high-precision engineered components and assemblies); GSP Crop Science (agrochemicals); Behari Lal Engineering (iron and steel); Shiprocket, Horizon Industrial and LEAP India (logistics); MV Electrosystems (electrical and power electronics equipment); and Augmont Enterprises (an integrated gold and silver platform).

First-of-a kind

At the other end of the spectrum, several niche players have also entered the market recently. These include Tempsens Instruments (a thermal engineering and specialised cable manufacturing company); Gaja Alternative (the first alternative investment fund company to tap the market); Rays of Belief (a for-profit social enterprise that delivers personalised therapy and early-intervention programmes for children with neurodevelopmental disorders, including autism); and Kwick Forensic Solutions Ltd (a forensic science and digital solutions firm on the SME platform).

While Sify Infinit Spaces Ltd, the first pure-play data centre company, deferred its public issue plans, the IPO of ESDS Software Solution, a cloud, data centre and AI ecosystem provider, is currently under way.

It is also heartening to see high-profile, institution-backed companies such as Sedemac Mechatronics (IIT Bombay), Indo-MIM Ltd (IIT Madras) and Ather Energy (IIT Madras) tap the capital markets. Companies from Rajasthan, Madhya Pradesh and Bihar, have also launched IPOs on the mainboard of the exchanges.

India leads from front

The divergence signals a shift. India’s IPO market is no longer merely riding broader market momentum. It is being powered by a wider and more diverse set of companies tapping public capital. The message from subscription levels is unambiguous — with most IPOs heavily oversubscribed, demand for primary-market offerings remains strong and sustained.

However, a SEBI study in 2024 found that about 54 per cent of IPO shares (in value terms) allotted to investors, excluding anchor investors, were sold within a week of listing. Individual investors sold 50.2 per cent of their allotted shares within a week of listing. Investors come to IPOs with different aims. Some are drawn by the prospect of short-term listing gains; others are in it for the long haul. The approach ultimately depends on an individual’s financial goals and risk appetite.

One thing is clear: India’s primary market is rapidly emerging as a global growth engine, drawing companies, investors and capital from across sectors and geographies. One hopes the trend will continue.

Published on August 28, 2026