IPO Reality Check: Half of Recent Listings Trade Below Issue Price
A comprehensive analysis by Axis Capital reveals a sobering reality for investors who bought into the IPO frenzy of recent years. Despite flashy headlines about listing gains, nearly half of companies that went public in the last six years are now trading below their initial offering prices, exposing the gap between market hype and long-term performance.
The data, covering 374 mainboard IPOs and follow-on public offerings listed between July 2020 and January 2026, shows that 180 companies currently trade below their issue price. This represents a significant portion of the market that has failed to deliver on initial investor expectations.
The Underperformance Breakdown
Among the underperforming stocks, the losses are substantial and telling. Seventy firms, representing 19 percent of all listed companies, are trading at losses between 25 and 50 percent from their IPO price. Even more concerning, 34 companies have plummeted more than 50 percent below their initial valuation.
The remaining underperformers show varying degrees of decline: 50 companies trade between 10 and 25 percent below issue price, while 26 companies are down up to 10 percent. This sustained pressure well after listing suggests fundamental pricing issues during the IPO process.
Winners and Market Dynamics
On the positive side, 194 companies, roughly half of all listings, are trading above their issue price. Among these success stories, 57 companies have more than doubled their value, trading over 100 percent higher than their IPO price. Another 44 companies have gained between 50 and 100 percent.
The performance distribution reveals a bifurcated market where winners and losers are clearly separated, suggesting that due diligence and company fundamentals matter significantly more than market timing or IPO momentum.
Market Lessons for Investors
These findings underscore the importance of thorough investment analysis rather than relying on listing day euphoria. The data suggests that while some IPOs deliver exceptional returns, the market efficiently separates quality companies from those with inflated valuations over time.
For investors, this analysis reinforces the principle that sustainable business models and strong fundamentals ultimately drive long-term stock performance, regardless of initial market excitement. The mixed results across different market cycles demonstrate that IPO investing requires careful selection rather than broad participation in every new offering.
The report serves as a reminder that in free markets, price discovery is an ongoing process that extends well beyond the initial public offering, rewarding genuine value creation while punishing overvaluation.