HNI Participation in Indian IPO Market Plummets Amid Market Volatility

High Net Worth Individuals (HNIs), once the primary drivers of oversubscription in Indian IPOs, are increasingly turning away from the primary market. Recent data from Prime Database reveals a significant fall in HNI applications across a range of recent initial public offerings (IPOs), even as the overall IPO activity picks up momentum in 2025. This trend marks a rare decline in HNI enthusiasm for IPOs after years of consistent participation and oversubscription.

Highlights:

• HNI application numbers have fallen significantly in recent IPOs.

• Recent IPOs such as Hexaware and Ather Energy saw just a few thousand HNI bids.

• Volatility in secondary markets and global tariff concerns cited as major deterrents.

Weak HNI Response Dampens Major IPOs Like Hexaware and Ather Energy

Despite large-scale IPOs entering the market in recent months, several marquee offerings have attracted dismally low HNI interest. The Rs 8,750 crore issue of Hexaware Technologies, which was anticipated to be a magnet for affluent investors, recorded only 3,540 HNI applications. Similarly, Ather Energy’s Rs 2,981 crore IPO in April garnered just 3,940 HNI bids — a stark contrast to the six-digit application figures seen in January.

This retreat is in sharp contrast to the start of the calendar year, where IPOs such as Standard Glass Lining Technology, Quadrant Future Tek, and Laxmi Dental witnessed between 2 lakh and 3.5 lakh HNI applications each. These January offerings significantly boosted the average HNI application number for the year to 1.2 lakh, though it remains below the 2024 average of 1.44 lakh.

Highlights:

• Hexaware Technologies IPO received just 3,540 HNI applications.

• Ather Energy’s IPO saw only 3,940 bids from HNIs.

• Early-year IPOs attracted 2–3.5 lakh HNI applications, skewing the average.

IPO Data by Year

Market Sentiment and Global Headwinds Drive Investor Apathy

Investment bankers and market participants attribute the sharp fall in HNI interest to mounting uncertainty in both domestic and global financial landscapes. The re-emergence of global trade tensions, led by tariff policies initiated by U.S. President Donald Trump, has significantly increased volatility across equity markets. As a result, sentiment in the primary market, which typically mirrors trends in the secondary market, has turned cautious.

An investment banker associated with one of the April IPOs noted that “the global tariff war and political uncertainty since Trump assumed office have deeply impacted risk appetite among affluent investors.” He further emphasized that “volatility in equities has translated into a defensive approach from HNIs, who now prefer to sit on the sidelines rather than deploy capital into uncertain IPO outcomes.”

Highlights:

• Global tariff tensions and Trump’s policies have triggered market instability.

• Sentiment in the IPO market closely tracks volatility in listed equities.

• HNIs have become more risk-averse in response to geopolitical headwinds.

Recent IPOs and HNI Participation

Declining HNI Engagement Despite Robust IPO Pipeline

The sharp drop in HNI activity comes at a time when the IPO market is otherwise witnessing a revival in volumes and listings. Between January 1 and May 24, a total of 12 IPOs have been launched, collectively raising close to Rs 21,000 crore. The capital-raising momentum is expected to continue, with two IPOs currently open for subscription and another slated to debut on Tuesday.

Moreover, nearly 70 companies are currently holding valid approvals from the Securities and Exchange Board of India (SEBI) and are waiting for optimal market conditions to go public. However, the lack of enthusiastic HNI participation could dampen valuations, oversubscription levels, and pricing efficiency in upcoming issues, especially those that rely heavily on retail and HNI demand for successful closure.

Highlights:

• Rs 21,000 crore raised through 12 IPOs till May 24 in 2025.

• Nearly 70 SEBI-approved IPOs are waiting in the pipeline.

• Weak HNI participation could affect future issue pricing and subscription metrics.

Structural Shift or Temporary Blip? Mixed Views on HNI Behavior

While some market participants view the current decline in HNI interest as a temporary response to geopolitical instability, others suggest that it may reflect a more structural shift in investment behavior among India’s affluent class. The rise of alternative asset classes, including high-yield debt, private equity participation, and real estate investment trusts (REITs), has provided HNIs with a broader spectrum of options, diverting attention away from primary market equities.

Nonetheless, investment bankers remain optimistic that improved macroeconomic clarity, easing of tariff tensions, and stronger equity performance could reverse the trend. “If sentiment improves and market volatility subsides, HNIs will likely return to IPOs with full force,” said a senior merchant banker overseeing two upcoming public issues.

Highlights:

• Debate continues over whether HNI apathy is cyclical or structural.

• Diversification into REITs and private equity may be reducing IPO appetite.

• Experts remain hopeful about a return of HNI interest with better market conditions.