The ‘house’ always wins: 2 stocks that profit from every IPO (even the flops)

The IPO boom on Dalal Street just can’t be missed with various studies pointing to 90 issues in the current calendar year that have already raised nearly Rs 1.5 lakh crore. IPOs help entrepreneurs to scale up their operations and also provide an exit for existing investors. Well-recognised companies, like Lenskart Solutionsand Tata Capital earlier this year have received an overwhelming response for their respective IPOs, in terms of local and global investors participating as well as subscription levels. Two leading finance companies, JM Financial and Kotak Mahindra Capital Company, which is part of Kotak Mahindra Bank, have been working tirelessly behind the scenes to ensure the success of IPOs, whether they are from start-ups or well-recognised players in a segment, and helping companies to list successfully on Dalal Street. The growth opportunities for these two finance players has not gone unnoticed – JM Financial surged 6.4% in Monday trade to Rs 154.7, and it had reached its 52-week high of Rs 199.75 on 22 August, 2025. Kotak Mahindra Bank was also up 1.1% to Rs 2,147.8 in Monday trade, and it had reached its 52-week high of Rs 2,301.6 on 22 April, 2025. The ‘gatekeepers of Dalal Street’ JM Financial and Kotak Mahindra Capital Company play an important role in bringing a company to Dalal Street. They are typically involved in helping companies going public comply with SEBI and other regulatory bodies’ requirements. These companies also assist them to meet leading global and local investors via investor roadshows in Mumbai and across the globe, In addition, these finance companies often also play the role of book running lead manager when an IPO opens for subscription. They typically charge 1-2% of the IPO funds raised for providing their myriad services. However, the charges by these finance companies for an IPO vary, depending on the risk profile and complexity of a company that is seeking to list on Dalal Street. Financial performance: Cashing in on the frenzy JM Financial is a diversified financial services group and the well-known Nimesh Kampani is the non-executive chairman. In its corporate advisory and capital markets division the company has highlighted in its investor presentation in the September 2025 quarter that it was number 1 in IPOs (in terms of value) and closed 15 capital market transactions amounting to nearly Rs. 28,000 crores. In addition, it has highlighted in this division it has a strong pipeline of merger and acquisitions (M&A) and advisory transactions. Segment revenue of corporate advisory and capital markets division was Rs 321.2 crore in the September 2025 quarter, a jump of 25.9% on a y-o-y basis, and segment profit also improved by 42.7% y-o-y to Rs 187 crore in the quarter under review. Strong performance of the corporate advisory and capital markets division helped JM Financial’s consolidated net profit rise 77.3% y-o-y to Rs 254.9 crore in the September 2025 quarter. Kotak Mahindra Capital Company (Kotak Investment Banking) is a subsidiary of Kotak Mahindra Bank. It is a full-service investment bank, offering a comprehensive suite of capital markets and advisory solutions to Indian companies, multinational corporations and financial sponsors. Its chairman is the well-recognised banker, Uday Kotak. The IPOs that it has been involved in the September 2025 quarter include Urban Company Limited’s Rs 1,900 crore issue and JSW Cement’s Rs 3,600 crore issue. In the result presentation of Kotak Mahindra Bank for Q2FY26, it was highlighted that Kotak Mahindra Capital had profit after tax (PAT) of Rs 60 crore in the September 2025 quarter vis-a-vis Rs 90 crore a year earlier. This could be attributed to lumpy earnings as IPO linked revenues are not linear. Growth outlook The IPO momentum is expected to remain strong in calendar year 2026 with recent media reports highlighting that issues worth nearly $20 billion or Rs 1.8 lakh crore are in the pipeline, and in various stages of receiving regulatory approval. JM Financial has highlighted 56 filed IPO transactions aggregating to nearly Rs 120,000 crore, and these IPOs are expected to hit Dalal Street over the next few quarters. Efficient use of capital – Return on equity (ROE) JM Financial had a ROE of 9% on a consolidated basis during the current financial year, according to Screener.in. Kotak Mahindra Bank in its investor presentation for Q2FY26 has highlighted for its capital markets division, which includes Kotak Mahindra Capital, it had a ROE of 13.1%. Are these stocks cheap? JM Financial trades at a consolidated P/E of 12.9 times, according to Screener.in, and Kotak Mahindra Bank on a consolidated basis trades at 23 times. The boom times in the IPO business are expected to continue in the next calendar year. Given that these two institutions are right in the middle of this boom, investors could consider adding these shares to their watch list. Disclaimer: Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information. The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only. Amriteshwar Mathur is a financial journalist with over 20 years of experience.