Are IPO listings still worth the risk for small investors?

Subscribe to enjoy similar stories. 2026 could be another big year for initial public offerings (IPOs) with more than 100 companies already receiving approval to raise about ₹1.4 trillion (around $15.5 billion), according to Prime Database. Millions of retail investors typically flock to IPOs in the hope of earning quick profits by ‘flipping’ these shares after listing, but seasoned participants urge restraint, often shaped by hard-earned experience.

“You have to not only learn from your mistakes, but also from the mistakes of others," said Gopal Sharma, a 50-year-old French-speaking tourist guide in Delhi, who has been investing in IPOs since 2008. “In my experience, one should not invest in seven out of 10 IPOs," said Sharma. He believes that lately IPOs are being priced at very high levels to provide an exit to angel and venture capital investors in the company, leaving little scope for individuals to make money on the IPO.

“In most cases …small investors are made a fool of," he said. Sharma learnt this the hard way in 2021, when he got an allotment in the IPO of One97 Communications, which runs the digital-payments platform Paytm. At the time, it was the largest IPO in India’s stock market history, and Paytm was a leader in the digital payments industry, causing many like Sharma to believe it was bound to be a winner.

The IPO was oversubscribed by retail investors by 1.66 times, and issued at ₹ 2,150. Sharma said he was allotted six shares. However, shares fell 27% on the day of listing and kept falling in the next few months.

“Still in Paytm shares, I am at a loss," said Sharma. He is holding on to them, hoping for a recovery. The Paytm experience is a cautionary tale that even IPOs of big companies can lose value.