Exclusive | Unfair to blame IPOs alone for value destruction, says Jefferies India’s Jibi Jacob

Jibi Jacob, MD and Head of Equity Capital Markets at Jefferies India, stressed that it would be unfair to place the blame for value erosion in the stock market solely on IPO companies, particularly when the broader market itself is struggling. Speaking at the Moneycontrol Global Wealth Summit 2025 on March 7, during the session titled The Upcoming ₹5 Lakh Crore IPO OpportunityJacob pointed out that India’s market capitalisation had decreased from $5.5 trillion to $3.7 trillion.”As the tide goes down, whether IPO company or secondary listed entities, they will all come down. Singling out IPO companies alone as a big cause of value destruction is not right,” he said.
Jacob also noted that IPO performance is closely linked to overall market trends. “IPO feeds on what is happening on secondary markets. In the first three months, we saw around 8–9 IPOs. Whether CY25 will outperform CY24 remains to be seen,” he added.
He further argued that IPO valuations remain reasonable given past performance. “If you look at the top 20 IPOs, median returns are 25-28%. If pricing were wrong, returns would be more negative. Pricing of IPOs is somewhat reasonable,” he explained.Domestic Institutional Investors Hold More Sway

GV Ravishankar, MD at PeakXV, highlighted the increasing influence of domestic institutional investors (DIIs) in shaping IPO pricing and market stability.

“DIIs have become so much more important in the current scheme of things. They have a massive say in pricing. They’re pushing very hard for a more attractive price. It is a good balance. I do think they bring stability now and have a much better knowledge on the ground,” he said.

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Surge in New-Age IPOs Expected

Jacob also predicted a significant wave of new-age companies preparing to enter the public market in the next two years.”Back in 2021-22, companies talked about achieving profitability in 3-5 years. That narrative has shifted. Now, businesses are eyeing IPOs as soon as they reach breakeven in just 18 months. We anticipate that 2025-26 will bring a surge of new-age companies entering the market,” he said.

Post-IPO Challenges and Market Outlook

Sarthak Misra, Partner at SoftBank, cautioned against short-term excitement around IPOs, stressing that the journey post-listing remains long and unpredictable.

“I started when Facebook went public in 2012, then quickly collapsed. And that summer, no IPO happened. I wouldn’t be surprised if we see something similar during this period. We all hope for excitement in the next two quarters, but it is a long journey,” he said.

Misra also predicted an uptick in consumer tech IPOs, along with stockbroking firms entering the market. “We expect a wave of consumer tech companies to emerge soon. Stock broking firms are also on the horizon—it’s only a matter of time,” he added.

Importance of Anchor Investors

Rahul Saraf, Head of Investment Banking at Citi, underscored the critical role of anchor investors in ensuring a successful IPO.

“The real value that bankers provide is judgement on valuation, positioning of the equity story, and choosing anchor investors. Allocate more to anchor investors, and allocate judiciously to them, even if it means offering at a lower price. We actually recommend having the right anchor investors on the book,” Saraf advised.

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