Mainboard IPOs: Big Players’ Game

Mainboard IPOs represent a critical juncture in the lifecycle of large corporations, often referred to as the “big players” in the financial markets. These Initial Public Offerings occur on the mainboard of stock exchanges like the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India, where companies with substantial market presence, robust financials, and significant growth potential seek to raise capital from the public. As of 04:24 PM +06 on Thursday, June 12, 2025, the mainboard IPO market continues to be a dynamic arena, dominated by well-established firms and industry giants. This segment differs markedly from the SME (Small and Medium Enterprises) IPOs due to the scale of operations, rigorous regulatory requirements, and heightened investor expectations. Let’s delve into the intricacies of this domain by exploring the opportunities it presents and the challenges it poses for these corporate behemoths.

Opportunities

The mainboard IPO landscape offers a plethora of opportunities for large companies, enabling them to leverage their size and reputation to achieve strategic goals that propel them to new heights.

• Massive Capital Infusion for Expansion – One of the primary advantages of a mainboard IPO is the ability to raise enormous sums of capital that can transform the company’s future. Large corporations, such as Reliance Jio or Tata Capital, which are anticipated to launch IPOs in 2025, can tap into the public market to fund ambitious expansion plans that require substantial investment. This capital can be directed towards diversifying product lines, acquiring competitors to consolidate market share, or investing in cutting-edge technologies like artificial intelligence, renewable energy infrastructure, or advanced manufacturing units. For instance, a company like LG Electronics India, planning a ₹15,000 crore IPO, can use these funds to enhance its manufacturing capabilities, establish new production facilities, and penetrate deeper into the competitive Indian consumer electronics market, thereby strengthening its foothold against global rivals.

• Global Market Access and Prestige – Listing on the mainboard elevates a company’s global standing and opens up a world of possibilities. The visibility gained from a mainboard IPO attracts international investors, strategic partners from across the globe, and institutional players looking for stable investment opportunities. Companies like Ather Energy, which listed on May 6, 2025, at a premium of ₹328 against an IPO price of ₹321, benefit immensely from this enhanced prestige, positioning them as leaders in the electric vehicle sector. This global recognition can open doors to foreign collaborations, joint ventures with multinational corporations, and export opportunities, allowing these firms to expand their reach and establish themselves as key players on a worldwide stage, competing with international brands.

• Liquidity and Wealth Creation for Stakeholders – Mainboard IPOs provide significant liquidity options for promoters, early investors who took risks in the initial stages, and employees with stock options as part of their compensation packages. The public listing allows these stakeholders to unlock the value of their holdings, creating substantial personal and institutional wealth that can be reinvested or utilized for other financial goals. For example, the IPO of Inventurus Knowledge, with an IPO price of ₹1,329 and a listing price of ₹1,900, enabled early investors to realize significant gains, rewarding their faith in the company’s vision. This liquidity event also serves as a powerful incentive for talent retention, attracting new talent by offering equity-based compensation plans tied to the company’s stock performance, thereby fostering a motivated workforce.

• Strong Regulatory Backing and Market Confidence – The mainboard segment benefits from a stringent regulatory framework overseen by the Securities and Exchange Board of India (SEBI), which ensures higher levels of transparency, accountability, and compliance with financial standards. This rigorous oversight fosters investor confidence, making the mainboard a preferred destination for institutional investors and mutual funds. Companies like Unimech Aerospace, with an IPO price of ₹785 and a listing price of ₹1,460 driven by a substantial GMP of ₹625, thrive under this structure, as the detailed disclosures and governance standards reassure investors about the company’s stability and growth prospects, leading to robust subscription rates and strong market support.

• Diversified Investor Base and Long-Term Stability – Mainboard IPOs attract a diverse pool of investors, including retail investors seeking growth opportunities, high-net-worth individuals looking for prestige investments, and institutional players like pension funds, insurance companies, and foreign institutional investors (FIIs) seeking stable returns. This diversification stabilizes the stock price post-listing and ensures a steady demand for shares, reducing the risk of sharp declines. For instance, the IPO of Swiggy, priced at ₹390 with a listing price of ₹415, saw strong participation from global investors, reflecting the trust in its long-term growth trajectory in the rapidly expanding e-commerce sector, providing a solid foundation for sustained market presence.

• Economic Impact and Industry Leadership – Large corporations launching mainboard IPOs play a pivotal role in driving economic growth by creating numerous job opportunities across various levels, innovating new technologies that set industry benchmarks, and contributing to national development goals. Firms like NTPC Green, with an IPO price of ₹108 and a listing price of ₹111, contribute significantly to India’s renewable energy targets by expanding solar and wind energy projects, while companies like Tata Capital bolster the financial services sector by offering innovative banking and lending solutions. These efforts reinforce their leadership positions, influence market trends, and support the country’s economic diversification and sustainability initiatives.

Challenges

Despite the numerous opportunities, mainboard IPOs come with a set of challenges that test the resilience, strategic planning, and adaptability of these big players in an ever-evolving market landscape.

• High Compliance and Disclosure Requirements – The stringent regulatory environment demands extensive financial reporting, adherence to corporate governance principles, and compliance with SEBI guidelines, which can be a daunting task for even the largest corporations. Companies like Sai Life Sciences, with an IPO price of ₹549 and a listing price of ₹650, must invest heavily in building a robust compliance infrastructure, engaging top-tier legal consultations, and hiring experienced auditor services to meet these standards. This can strain operational budgets, divert resources from core business activities like research and development, and pose a significant challenge, especially for firms transitioning from private to public ownership, requiring a complete overhaul of their administrative processes.

• Market Pressure and Performance Expectations – Once listed, mainboard companies face intense scrutiny from financial analysts, institutional investors, retail shareholders, and the media, creating a high-pressure environment to deliver consistent quarterly results. This pressure can lead to short-term decision-making that may compromise long-term strategic plans, such as delaying innovation projects to boost immediate profits. For example, Carraro India, with an IPO price of ₹704 and a negative GMP of (₹119) resulting in a listing price of ₹660, faced market skepticism and had to address concerns about its growth trajectory, highlighting the challenge of meeting elevated performance expectations that can overshadow the company’s long-term vision.

• Volatility and Market Sentiment – Even large corporations with strong fundamentals are not immune to market volatility driven by external factors such as interest rate hikes by central banks, geopolitical tensions affecting global trade, or unexpected economic slowdowns. The mainboard IPO of Senores Pharmaceuticals, with an IPO price of ₹391 and a listing price of ₹594 driven by a substantial GMP of ₹280, demonstrates how positive sentiment can boost prices in the short term, but a sudden shift in market mood—due to factors like inflation or policy changes—could reverse these gains, posing a significant risk to investor confidence and stock stability.

• High Costs of Going Public – The process of launching a mainboard IPO involves substantial costs that can impact the company’s financial health in the initial phases. These expenses include underwriting fees paid to investment banks, extensive legal consultations to ensure compliance, elaborate marketing campaigns to attract investors, and global roadshows to pitch to institutional investors. Companies like LG Electronics India, targeting a ₹15,000 crore raise, must allocate a significant portion of their budget to these activities, which can erode initial capital gains and require meticulous financial planning to ensure the company remains profitable and cash-flow positive in the post-listing period.

• Overvaluation and Correction Risks – The hype surrounding mainboard IPOs of big players can lead to overvaluation, driven by high Grey Market Premiums (GMPs) and speculative trading by retail and institutional investors. Unimech Aerospace’s IPO, with a GMP of ₹625 against a listing price of ₹1,460 compared to an IPO price of ₹785, exemplifies this trend, reflecting high market expectations. However, if the company fails to deliver on its growth promises—due to operational inefficiencies or market saturation—a sharp correction could occur, disappointing investors, damaging its market reputation, and leading to a loss of shareholder value in the long run.

• Competitive Landscape and Market Saturation – Large corporations entering the public market often face intense competition from existing industry leaders and agile new entrants leveraging disruptive technologies. In sectors like technology and e-commerce, where Swiggy and Inventurus Knowledge operate, market saturation and the emergence of innovative startups can challenge their dominance and market share. This competitive pressure requires continuous innovation, significant reinvestment in research and development, and strategic marketing efforts, adding complexity to their post-IPO strategies and demanding a proactive approach to maintain their leadership positions.