A Four-Year High: What’s Driving the Big-Ticket IPO?
Investors are witnessing a notable script-flip in 2025. Historically, big-ticket IPOs (Initial Public Offerings) have often been met with a lukewarm response from the investing community. Also, the investors generally perceive them as too large to deliver spectacular listing gains. However, this year, there is a change in the trend. There is a surge in demand for large issues. The average subscription for IPOs has exceeded ₹5,000 cr and has hit a 17.7x magnificently. This figure is the highest since the 2021 frenzy. It is also substantially placed above the historical average of 8x to 10x that is seen in previous years.
But this is not an isolated story. Of the six major IPOs launched in this category so far, four have been mega blockbusters. These four IPOs have secured subscriptions in the double digits:
- LG Electronics India (38.17x)
- Lenskart Solutions (28.35x)
- HDB Financial Services and Groww have received an identical demand at 17.6x each.
On the other hand, the offerings from Hexaware Technologies (2.27x) and Tata Capital (1.96x) witnessed a "relatively muted" response. This divergence can be a crucial market signal. This year’s trend is not one of indiscriminate euphoria. It is rather a narrative of discerning capital, a flight to quality, and perhaps a deep structural shift in the market's maturity. So, an important question for the investors is: What’s fuelling this resurgence in Large-Cap offerings?
Who Are the IPO Drivers?
A confluence of powerful market forces is driving the robust demand for 2025's mega-IPOs. One of the main drivers is immense institutional liquidity.
Market participants note that QIBs (Qualified Institutional Buyers), both domestic and foreign, have been actively seeking large, high-quality assets to deploy this capital. For a fund manager needing to invest substantial sums, a ₹5,000cr+ issue can offer the only viable route to take a meaningful position without causing significant price disruption in the secondary market.
More importantly, the market's memory is not short. The highs of 2021 were narrative-driven tech companies that had commanded premium valuations. This has given way to a more discerning investment strategy. Investors, today, might be demonstrating a clear preference for profitable, proven businesses with established market leadership and strong brand equity.
Investors are no longer just buying a "story"; they are buying a balance sheet, a market share, and a clear path to profitability. So, is this a redirection from narrative-based investing to fundamentals-driven capital allocation?
Why Not All Mega IPOs Flew?
In 2025, there were blockbusters, as well as the so-called "muted" subscriptions. Hexaware (a Feb re-entry) and Tata Capital (a major Oct debut) were subscribed just over two times and just under two times, respectively. However, we can presume a newer market functioning with this.
Can this be the strongest evidence of a healthy, functioning market? In any other context, a full subscription for an issue of this magnitude might have been seen as a success. Therefore, it can indicate that demand was sufficient and dominated by institutional investors.
This retail frenzy might not be a sign of weakness, but of "selectivity." The market is demonstrating that it is not blindly chasing every large offer. Valuations are being scrutinised.
Hexaware's re-entry, being a private equity exit, has naturally invited a closer look at the price. Similarly, Tata Capital's issue was priced to reflect its substantial, diversified business, likely attracting long-term, stable institutional holders rather than short-term speculators hunting for just listing gains. In this rational price discovery, an issue is subscribed but not frenzied.
A Structural Shift for the Primary Market
If you look at the broader landscape, this trend might seem to be more than a cyclical bull-market phenomenon. The market's behaviour is moving with the proposed regulatory changes. In Aug 2025, the SEBI (Securities and Exchange Board of India) had proposed a significant overhaul for large IPOs. This suggested a reduction in the mandatory retail investor quota from 35% down to 25%. Simultaneously, the allocation for QIBs was increased from 50% to 60%.
This proposed regulation is designed to achieve greater listing stability. This alignment between market appetite and regulatory intent can lead to a new, more stable foundation being set for India's primary markets. So, are we witnessing the emergence of an ecosystem that can support the nation's IPOs, on the back of hype, or on the strength of their fundamentals?
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This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
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