India’s Primary Market Shows Resilience as Old-Economy and Niche Sectors Drive IPO Activity

The Indian primary market has maintained strong momentum in recent years, establishing itself as one of the most active initial public offering (IPO) markets globally with issues crossing 350 annually. Both mainboard and SME segments continue to attract a growing base of companies and investors.

Traditionally, primary market activity peaks during periods when secondary markets thrive and benchmark indices scale new highs. However, the current cycle differs as primary-market activity remains steady even while the Nifty and Sensex move sideways. The SME segment has experienced a continuous run, highlighting a strong market appetite for smaller and niche businesses.

Old-economy sectors—traditional industries centered on physical goods, heavy manufacturing, and manual labor—are returning to capital markets. While previous IPO cycles focused heavily on trending themes like IT, telecom, infrastructure, or financial services, the current landscape features companies spanning steel, coal, textiles, power, recycling, and metals.

Several old-economy players have recently tapped the market, including Lumino Industries, Annu Projects, Laser Power & Infra, Kusumgar, Aastha Spintex, Ardee Industries, Indo-MIM, Hy-Tech Engineers, GSP Crop Science, Behari Lal Engineering, Shiprocket, Horizon Industrial, LEAP India, MV Electrosystems, and Augmont Enterprises.

Alongside traditional industries, niche players have also entered the public market. These include Tempsens Instruments, Gaja Alternative, Rays of Belief, and Kwick Forensic Solutions on the SME platform. Additionally, while Sify Infinit Spaces deferred its public issue plans, the IPO of ESDS Software Solution is currently underway.

The market has also seen participation from institution-backed companies such as Sedemac Mechatronics, Indo-MIM, and Ather Energy, as well as regional enterprises from states like Rajasthan, Madhya Pradesh, and Bihar launching mainboard IPOs.

At the same time, trading patterns indicate varied investor behavior. A SEBI study in 2024 revealed that approximately 54 per cent of IPO shares in value terms allotted to investors, excluding anchors, were sold within a week of listing. Individual investors sold 50.2 per cent of their allotted shares in the same timeframe, reflecting differing financial goals and risk appetites between short-term listing gains seekers and long-term investors.

India's primary market continues to draw companies and capital across diverse sectors, reflecting broader geographic and industrial participation.

"The shift in India's IPO landscape towards diverse old-economy sectors and niche SME players indicates a mature and broadening capital market. Unlike previous cycles reliant on a few trending sectors, current primary market activity is driven by a wide spectrum of industries. However, high post-listing selling pressure highlighted by regulatory data suggests that investors must carefully align their participation strategies with their individual financial goals and risk appetites." — Dr. Shishir Gupta, Founder & CEO, StartupLanes