Nithin Kamath Says IPOs Are the Only Bullish Corner: Is the IPO Party Real?

On 7 October 2026, Zerodha co-founder Nithin Kamath posted on X that "the only bullish corner of the market right now is IPOs." He said the broader market feels like a bear market, while new listings feel like a celebration.

He backed the post with data on 401 mainboard IPOs. The headline number is striking: about two in three IPOs from the past year trade above their issue price, even as the Nifty struggles.

Does that mean IPOs are working for everyone? Not quite. Here is what the data says, what it leaves out, and how a retail investor can look at it.

Why Are IPOs Doing Well When the Stock Market Is Weak?

The divergence looks unusual, but investors are not necessarily becoming bullish on the entire market. They are becoming selective about where they put their money.

First, IPOs offer investors a fresh opportunity at a defined price. An investor may not want to buy existing stocks at their current valuations but may still find a new company, sector or growth story attractive at its IPO price. This helps explain why FPIs have been selling listed equities while still putting money into primary issues.

Second, domestic liquidity is still supporting IPOs. Retail and domestic investors continue to have money available for new issues even as the secondary market remains weak. Reuters has also attributed the strong primary-market activity partly to domestic liquidity.

Third, September's IPO rush was partly about supply, not just demand. Several companies had IPO approvals nearing expiry, encouraging them to launch before the September 30 deadline. So the unusually high number of IPOs does not necessarily mean investors suddenly became much more bullish.

So, the divergence is not as contradictory as it first appears: investors can be cautious about existing stocks while still selectively buying new companies, especially when domestic liquidity remains strong and a backlog of IPOs is coming to market.

67.2% of Recent IPOs Are Above Issue Price — But How Strong Is the IPO Performance Really?

First, What Exactly Is Being Measured?

Kamath’s chart looks at 401 mainboard IPOs across five 12-month cohorts. It compares each stock’s price as of 6 October 2026 with its IPO issue price, after adjusting for splits, bonuses and rights issues. The comparison excludes dividends as well as SME IPOs, REITs, InvITs and FPOs.

The key point is that “above issue price” does not mean “listing gain.” The issue price is what investors paid in the IPO, while the listing price is where the stock first traded on the exchange. A stock that lists 30% above its issue price but later falls to 10% above it would still be counted as being above issue price in Kamath’s chart.

The chart uses the median return, which is the performance of the IPO sitting in the middle when all IPOs are ranked from best to worst. This matters because a few huge winners can pull an average higher and make the overall picture look stronger than it is for a typical IPO.

The Latest IPO Cohort Has Been Exceptionally Strong

Of the 125 mainboard IPOs listed between October 2025 and September 2026, 67.2% are above their issue price, while the median return is 24.7%.

That means more than two-thirds of this group are currently trading above what investors paid in the IPO, and the IPO in the middle of the ranking is up nearly a quarter.

The contrast with the previous 12-month period is striking. Of the 95 IPOs listed between October 2024 and September 2025, only 47.4% are above their issue price, while the median return is -9.4%.

So, on this measure, the latest IPO cohort has performed dramatically better.

But 67.2% Does Not Mean Every IPO Is Working

This is where the headline number needs some context.

32.8% of the latest 125 IPOs are still below their issue price. Most of those losses are relatively limited, with 20.8% of the total cohort down by less than 25%. But 5.6% have fallen by more than 50%.

There is also a wide gap between the winners and losers. 13.6% of the latest IPOs have more than doubled, while others have fallen sharply. The 24.7% median return therefore tells us what happened to the middle IPO; it does not describe the experience of every investor.

There is another limitation: the latest cohort has had less time to play out. Some IPOs in the October 2025–September 2026 group have been listed for nearly a year, while others have been trading for only weeks. Older cohorts have had much more time to go through different market conditions.

So, Is the IPO Party Real?

At the aggregate level, yes. The latest cohort is clearly performing much better than the previous year's cohort on this measure.

But the 67.2% figure is evidence of a strong IPO cohort, not proof that IPOs have become easy money.

So the next question is more important: are investors being rewarded because these are fundamentally strong businesses, or are some IPO valuations simply getting ahead of the underlying businesses?

Is the IPO Boom a Sign of Strength — or Are Valuations Getting Ahead of the Business?

There are arguments on both sides. September was the busiest month for mainboard IPOs in nearly three decades, with 34 issues raising about ₹39,000 crore. The strong activity shows that companies and investors remain willing to participate in the primary market.

But strong demand does not automatically mean every IPO is attractively valued.

As per reports, 13 of 59 companies listed in 2026 with a reported P/E were trading above 100x earnings. At 100x P/E, investors are paying ₹100 for every ₹1 of annual earnings, leaving little room for disappointment.

The source of IPO proceeds also matters. About 75% of September's fundraising came through OFS, where existing shareholders sell their shares rather than the company raising fresh capital. NSE's ₹22,568.94 crore IPO, for example, was entirely an OFS. This is not inherently negative, but the money primarily went to existing shareholders rather than into the business.

At the same time, listing gains are cooling. Average listing gains fell to 7% from 29% in FY26, while average oversubscription declined to 39x from 71x.

So, the IPO boom shows strong investor appetite, but it does not mean valuations are reasonable across the board. The market is rewarding some new listings while becoming more selective about what it is willing to pay.

How to Look at an IPO in a Weak Market: Questions to Ask

This is not advice to buy or avoid any IPO. These questions can help you judge one:

• Is it a fresh issue, an OFS, or a mix? Where does the money go?
• How does the valuation compare with similar listed companies?
• Does the company generate profits, or is it mainly growing sales?
• How have similar IPOs performed after listing?
• Can you stay invested if the stock trades below its issue price?

A strong group average does not guarantee any single IPO works. One in three in the latest group is still below issue price.

Big IPOs Coming: Will the Party Continue?

Supply is not slowing. An per a report, the mainboard pipeline at about ₹3.86 lakh crore, roughly 3.4 times the ₹1.12 lakh crore raised so far in 2026.

The Jio Platforms’ IPO could open around 21 October, though this is not officially confirmed. A very large issue could test investor appetite by drawing significant capital at once.

The bigger question is whether strong IPO demand can continue if the broader market remains weak. There is no reliable way to time when weakness in the secondary market will spill over into IPOs, so the current IPO strength should not be assumed to last indefinitely.

The Takeaway

Kamath’s observation is backed by the data: recent IPOs have performed well as a group even as the broader market has weakened. But that does not make every IPO attractive.

The latest cohort has also had less time to play out, while valuation, business quality and the share of OFS in an issue still matter. Treat the data as a starting point for your own homework, not as a buy signal.