QIBs emerge as the silent power players in IPOs
In India’s ever-evolving primary market, one group is quietly stealing the spotlight — Qualified Institutional Buyers (QIBs). Once background players, these large financial institutions are now becoming the unsung heroes of big-ticket IPOs, stepping in when retail and non-institutional investors lose confidence.
Recent high-profile listings — WeWork India, Hyundai Motor India, and Bharti Hexacom — have all seen a similar trend: slow retail interest early on, followed by a dramatic surge in subscriptions on the final day, thanks to institutional buying.
How QIBs are becoming the new market stabilisers
According to Ambareesh Baliga, an independent market analyst, merchant bankers no longer roll out large IPOs unless they already have firm commitments from institutional investors.
“They usually secure at least 1.5 to 2 times commitments from QIBs before going public. Otherwise, the IPO might be delayed or even cancelled,” Baliga told Axpert Media.
This behind-the-scenes coordination means that QIBs now dictate the fate of India’s biggest public offerings, effectively becoming the “make-or-break” factor for IPO success.
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Case in point: WeWork India’s ₹3,000 crore IPO
WeWork India’s ₹3,000 crore maiden issue, which closed on October 7, 2025, barely scraped through with 1.15x total subscription. The lifeline? Institutional money. The QIB portion was subscribed 1.79x, while retail investors filled just 61% of their quota.
Meanwhile, non-institutional investors (NIIs) lagged even further at 23% subscription — showing a sharp divide between institutional conviction and retail hesitation.
Hyundai and Bharti Hexacom: The same story, bigger scale
When Hyundai Motor India launched the country’s largest-ever IPO worth ₹27,870 crore in 2024, it looked like another underwhelming show — until the final day. Institutional investors rushed in, oversubscribing their category 6.97 times, while retail and NIIs barely crossed the halfway mark.
Bharti Hexacom saw an even more stunning reversal. Its ₹4,275-crore issue was oversubscribed 29.88 times, powered mainly by QIBs, who bid 48.57 times their reserved quota. Retail investors, by contrast, participated modestly at 2.83 times.
All three IPOs were offers for sale (OFS), meaning no new capital was raised for the company — only existing shareholders benefited from the proceeds.
Why QIBs matter now more than ever
As per SEBI rules, if an IPO fails to achieve 90% subscription, the issue is typically cancelled and investors get their money back. In this tightrope scenario, QIBs act as the stabilising backbone, ensuring that marquee offerings don’t collapse due to weak retail participation.
Market veteran G. Chokkalingam, founder of Equinomics Research, says QIBs tend to enter when valuations appear stretched — taking a longer-term institutional view, unlike retail investors who focus on listing gains.
“When retail investors find valuations uncomfortable, QIBs often step in as the saviours,” Chokkalingam noted.
Valuations tell the story
- WeWork India priced its issue at ₹648 per share, valuing it at 4.4x FY25 price-to-sales, with a market cap of ₹8,684.7 crore.
- Hyundai Motor India commanded a 26x FY24 P/E, leaving little immediate upside for short-term investors.
- Bharti Hexacom was listed at a steep 51.9x FY23 earnings, still managing to attract strong institutional support.
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How these IPOs performed after listing
Despite early jitters, performance post-listing has been mixed:
- Hyundai Motor India debuted with a mild 1.32% discount, but has since surged nearly 30% above its issue price, last seen at ₹2,516.
- Bharti Hexacom rewarded investors handsomely — listing at a 32% premium and now trading 205% above issue price.
- WeWork India is set to list on October 10, 2025, with analysts watching closely for signs of another QIB-backed rescue story.
The takeaway for retail investors
While institutional support is critical for market confidence, analysts advise retail investors to stick to their valuation comfort zone. IPOs can look exciting on paper, but a prudent entry point matters more than momentum.
As India’s capital markets mature, QIBs have undoubtedly become the new power brokers — steering sentiment, stabilising offers, and defining success for billion-dollar public listings.
