IPOs are the Only 'Bullish Corner' Amid Bearish Market: Nithin Kamath
Zerodha CEO Nithin Kamath highlights a massive divergence between the booming IPO market and the declining broader secondary market.
In a striking observation of the current Indian financial landscape, Zerodha CEO Nithin Kamath has pointed out a massive disconnect between the primary and secondary markets. While the broader stock market appears to be sliding into a bearish phase, the Initial Public Offering (IPO) segment is thriving, acting as a solitary island of optimism.
A Stark Divergence in Market Sentiment
Speaking via a post on X, the Zerodha co-founder noted that while headline figures might not immediately scream crisis, the actual feeling on the ground is one of steady decline. He described the current state of the broader market as feeling distinctly bearish, contrasting it sharply with the high-octane energy seen in new listings.
"The only bullish corner of the market right now is IPOs," Kamath remarked, highlighting the unusual gap between the two sectors. "I don't remember the last time we saw such a stark divergence between the primary and secondary markets. Strange are the times we live in."
The IPO 'Party' vs. The Secondary Slump
Kamath characterized the IPO sector as a "full-on party," where recent listings have shown remarkable resilience and strength. This stands in direct opposition to the secondary market, where investors are grappling with a downward trend in existing share prices.
To illustrate this phenomenon, Kamath shared data analyzing 401 main-board IPOs across five annual cohorts, excluding SME listings, REITs, InvITs, and FPOs. The data reveals a clear pattern of how recent market entrants are outperforming older ones in terms of immediate returns.
Breaking Down the Numbers: Recent Success Stories
The most recent cohort of companies—those listed between October 2025 and September 2026—shows incredible strength:
- 67.2% of these IPOs are currently trading above their original issue price.
- The cohort has delivered a median return of 24.7%.
- 13.6% of these recent listings have more than doubled their value, trading at over 100% above their issue price.
- 17.6% are up between 50% and 100%.
- 18.4% are trading in the 25-50% gain bracket.
The Turning Tide: Comparing Cohorts
The data highlights how quickly the "bullish" sentiment can shift. When looking at the previous year's cohort (October 2024 to September 2025), the picture is much bleaker:
- Only 47.4% of those 95 IPOs are trading above their issue price.
- The median return for this group is negative 9.4%, meaning more than half are currently underwater.
While older cohorts from 2021-2022 and 2022-2023 also show positive median returns, Kamath cautioned that these older stocks have had significantly more time to mature and fluctuate compared to the recent wave of high-performing new listings.