The Ultimate Guide to Trading IPOs in 2025

While reviewing the Indian equity market performance in 2024, we observe a mixed trend in the secondary market. The first three quarters were driven by a broad-based uptrend, whereas the final quarter experienced a slump, accompanied by rising volatility across large-cap, mid-cap, and small-cap stocks. Despite these fluctuations, investor interest in the primary market remained robust and evergreen.

A total of 94 mainboard public issues were launched in 2024 — the highest in any year over the past decade — raising a record Rs. 1,80,650 crore in aggregate. These IPOs continued to attract individual investors seeking substantial listing gains, moreover, 5 issues gained over 100% on Listing Day.

The month-wise distribution of public issues in 2024 reveals December as the most active month, with 16 public issues launched:


Similarly, over the past ten years, the primary market buoyancy in 2024 stands unparalleled:


While listing gains is a buzz word associated with IPOs and a reason for many retail investors applying for it, people often find a dilemma whether to just sell on listing and encash the listing gains, or to let the price discovery happen throughout the listing day and then book profits, or to bet on the company’s upside potential and hold the stock, and for how much period to hold etc.

Well, the answer depends a lot on the company specific factors and the extant industry and macro factors, let’s try to gain a bird eye view of what the statistics from IPOs that launched in 2024 reveal and help to navigate these answers.

Listing Gain: On Day Close vs. Listing Price

Particulars Listing Day Gain(calculated on list day close) Listing Gain (calculated on the list price)
Average P/L 29.44% 27.87%
Median P/L 20.96% 15.77%
Max P/L 195.53% 181.46%
Min P/L -20.22% -13.19%
No. of IPOs (a) 94 94
Gaining Instances (b) 74 73
Losing Instances 20 21
Strike Rate (%) (b/a*100) 78.72% 77.66%

We can observe that in 2024, on an average, IPOs have gone up on the day of listing, providing better listing gain payoff on the day’s close than on the very moment of listing. However, what happens if you don’t sell the stock on listing day and hold on to it. Let’s check that out…

Profit/Loss Outcomes for Holding Allotted IPO Stocks Over Different Periods


If wished to hold the stock due to the short-term bullish view, the stats in above table favour to keep the position open for 6 months, instead of encashing earlier. Within that period, for majority of the companies, first two quarters of results would be also announced, giving a further boost in price of a young fast growing company. (Note: These stats may not be comparable due to difference in number of IPOs.)

However, quite frequent investors grieve over not getting the allotment for IPOs. For IPO companies for which one is optimistic about share price growth shortly, he opts for purchasing the share once they are listed. In this instance, one should just prefer to buy at the listing price and avoid purchasing on listing day close level, unless the stock witnesses a correction on the first day, because we observed in the first table that there are usually incremental returns on the day of listing, which could elevate the cost of acquisition. The point gets further clarified with following

Current Profit/Loss position: Purchasing stock at listing price v. Purchasing stock at listing day close


While above table reflects it is preferable to buy the stock at listing price over the list day close, on deciding the short-term holding period for such acquired stock, alike in the case of allotment, the 6 months period gives a data-supported preference (Note: These stats may not be comparable due to difference in number of IPOs).

Profit/Loss Outcomes for Holding IPO Stocks Purchased at Listing Price Over Different Periods


Considering the performance of IPOs launched in 2024, we can have following takeaways:
- To enjoy listing gains of IPO, instead of selling the stock immediately at the point of listing, prefer to sell it on the day close, and enjoy on an average the incremental stock gains due to the trades on the listing day.
- However, if you want to hold the IPO allotted stocks as you have the short-term bullish view, then 6 months holding period gives better returns.
- In case, if you do not get the allotment in IPO, but have a short-term bullish view for it, then in buying it from open market, just buy it at the list price and not at the listing day close, to not inflate the cost with listing day’s usual price appreciation during the trading hours.
- Again, for such acquired stocks at the listing price, a 6 months period works out as the most attractive holding period.

However, it is important to note that these inferences are drawn from a small sample size of IPOs in 2024, and they may not necessarily hold true for 2025. Nonetheless, if you make some sense of these outcomes, you can analyse more historical data and come out with further refinement of these inferences.

A Word to Investors:

While 2025 may present ample opportunities for listing gains, it is crucial to conduct thorough analysis of a company’s business model, financial health, growth prospects, and valuation before investing. Equity investments inherently carry risks, and informed decision-making is the key to successful investing.

Navigating January: What Lies Ahead for the Nifty 50?

The Year 2024 brought substantial gains for investors, with most sectoral indices ending positively, except for Nifty FMCG and Nifty Media. However, as we enter the new year 2025, the focus shifts to January—a historically tricky month for the markets. As I mentioned in my previous article how yield curve inversion brings tough times for the US market, here are some more historical trends that guide us to remain cautious with our markets too in January. Let us analyze the market dynamics, identify historical patterns, and develop insights for navigating this pivotal month.

The Forex-Nifty Nexus: An Interplay of Dollar Strength and Market Confidence

Understanding the interplay between forex reserves, USD/INR exchange rates, and the US Dollar Index (DXY) is critical to decoding Nifty’s trajectory:

Relationship Between Nifty 50 and Forex Reserve


Forex Reserves and Nifty 50

- Strong forex reserves signify macroeconomic stability, boosting confidence among foreign institutional investors (FIIs) and attracting equity inflows. On the other hand, declining reserves often lead to FII outflows as the dollar-adjusted returns on Indian equities become less appealing.
- Historical trends show that market corrections are commonly associated with periods of shrinking reserves, highlighting their critical role in maintaining market stability.

US Dollar Index (DXY), USD/INR and Forex Reserve

- The DXY, which measures the dollar's strength against a basket of global currencies, shares a direct relationship with the USD/INR exchange rate. A rising DXY weakens the rupee, compelling the Reserve Bank of India (RBI) to intervene in the forex market.
- While these interventions help stabilize the currency in the short term, they deplete forex reserves and weaken the economy's capacity to withstand external shocks, often resulting in increased volatility in equity markets.

Relationship between US Dollar Index and USD/INR Exchange Rate


The Strengthening Dollar and Its Implications

The potential return of Trump-era policies—such as “Make America Great Again” (MAGA), emphasizing domestic manufacturing, tax cuts, and fiscal stimulus—could drive the US dollar higher. This strengthens the DXY, depreciates the rupee, and increases pressure on India's forex reserves. Historically, these factors have had a cascading effect on Indian equities, often triggering corrections in the Nifty 50.

Relationship between US Dollar Index and Nifty 50


The January Jinx: Historical Evidence and Market Sentiment

An analysis of Nifty 50’s performance since 2001 highlights January as a challenging month:

- Negative Returns: January has averaged -0.59% returns, making it the second-worst month after February. Out of 24 instances, 15 have delivered negative returns—the highest among all months.


- FII Outflows: January is the only month with consistent net FII outflows, averaging Rs. 45 crores, with divestments recorded in 10 of 24 instances.


- Weak Earnings Seasonality: Q3 earnings, disclosed in January, have historically shown the second-lowest year-over-year growth in Profit After Tax (PAT) and the second-lowest absolute PAT, contributing to subdued investor sentiment.

Impact of Rising U.S. Bond Yields on S&P 500 and Nifty 50: A Cascading Effect

It has been observed that a minimum 75 basis point increase in the 10-year US government bond yield often leads to a correction in the S&P 500 index. As the saying goes, “When America sneezes, the world catches a cold,” indicating that such movements also impact global markets, including the Nifty 50. With the bond yield currently up by approximately 97 basis points, it will be important to monitor the S&P 500’s response and its cascading effect on the Nifty 50.


Period Fall in S&P 500 Fall in Nifty 50
29 March 2022 - 13 June 2022 19% 9%
30 November 2022 - 28 December 2022 7% 3%
14 September 2023 - 27 October 2023 9% 5%
28 March 2024 - 18 April 2024 5% 1%

Conclusion: Stay Disciplined Amidst Uncertainty

As we step into January, historical data and macroeconomic indicators signal the need for caution. The interplay of forex reserves, a strengthening dollar, and seasonality trends could weigh on Nifty 50’s performance in the short term. However, India’s long-term growth narrative remains intact, supported by structural reforms and evolving investment cycles.

Patience and discipline will be key for navigating this volatile period. Market participants are advised to focus on quality assets, maintain a diversified portfolio, and await for cues from the Union Budget to be announced on February 1.