Retail participation in IPOs remains lacklustre as investors eye quality over listing day gains
The funds raised and the number of IPOs in July has been the highest so far in 2026
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Notwithstanding the early signs of a revival in the primary markets, retail participation in the initial public offering has remained lacklustre as investors have focused on the quality of issuances over the lure of listing day gains.
Of the 12 issues that hit the market in July, the retail portion of only five companies was oversubscribed in double digits, while six companies registered single digit oversubscription.
The retail portion of the ₹9,275-crore Manipal Health Enterprises — the second biggest issue this year, after SBI Funds Management — was undersubscribed as it received bids for only 93 per cent of shares offered. The company recorded a listing day gain of 11 per cent.
The retail portion of the SBI Funds Management IPO of ₹9,812 crore was oversubscribed four times. It registered a listing day gain of 7 per cent.
The funds raised and the number of IPOs in July has been the highest so far in 2026 as sentiments in the secondary markets have bounced back. In all, 12 companies raised ₹28,646 crore last month, against seven companies mopping up ₹2,718 crore in June, according to data sourced from primedatabase.
Retail participation in an IPO refers to individual investors applying for shares of up to ₹2 lakh in mainboard issues. Mainboard IPOs typically reserve at least 35 per cent of the net offer for retail individual investors.
Listing gains on the decline
Pranav Haldea, Managing Director, PRIME Database Group, said retail investors, as the SEBI study also showed, primarily come in for listing gains. With the average listing gain falling from 30 per cent in 2024 to just 6 per cent in 2026, retail participation has dwindled, as shown by the average number of IPO applications, which have declined from 18.86 lakh in 2024 to just 9.85 lakh in 2026.
“Investing for listing gains is a completely acceptable strategy. My only advice to retail investors, though, would be to exit even in case the IPO lists at a discount, as they have not done any analysis on the long-term prospects of the company,” he said.
Uday Patil, executive director at PL Capital said the lacklustre retail participation in the IPO can be attributed to a weak post listing performance, higher valuations, availability of alternative investment opportunities and macro-economic uncertainty.
“Valuation continues to be one of the primary concerns from the retail investors’ perspective. Gone are the days when most IPOs were heavily oversubscribed only to benefit from listing gains,” he said.
Gaurav Bhandari, CEO, Monarch Networth Capital, said the average listing gains collapsed to 8 per cent last fiscal from 30 per cent in FY’25, with median gains at just 3 per cent.
Retail participation in India has always been a listing-gain trade, not an equity-ownership decision. Moreover, issuers and bankers price in the entire next three years of earnings, leaving no margin for the buyer, he said.
Krishna Patwari, Founder and Managing Director of Wealth Wisdom India, said the SEBI data for June suggests retail investors are becoming more selective and do not want to fund promoters’ exit. Mainboard IPOs raised ₹1,652 crore across just three issues, with about 60 per cent of the issue comprising Offers-for-Sale, he said.
Published on August 8, 2026
