IPOs are cooling.

Initial offerings raised yet another record amount in March, following stellar performances in

January and

February. But don't be fooled by the numbers: Deals are giving up first-day gains quickly, and this week saw a number of lackluster debuts due to

Nasdaq

jitters and a glut of deals, observers say.

IPOs in the first quarter raised $23.7 billion, making it the second-busiest period ever after 1999's fourth quarter, according to

Thomson Financial Securities Data

. April likely will produce another record, with

AT&T's

(T) - Get Report

wireless

spinoff alone expected to raise around $11.5 billion.

But "the euphoria for IPOs is dwindling," says Vinnie Slavin, a sales trader who tracks IPOs for

Cantor Fitzgerald

. (Slavin doesn't invest in IPOs.)

Indeed, deals this year are up an average of 53%, a sharp decline from fourth-quarter average gains of 150%, according to Thomson Financial.

This week saw a number of lukewarm debuts, aside from

ArrowPoint's

(ARPT)

248% rise Friday. Even companies in hot sectors like broadband

Telocity

(TLCT)

, with strong backing from

Merrill Lynch

, couldn't command a spectacular first-day pop, rising only 25% on March 29.

Hanaro Telecom

(HANA)

, a Korean phone company and ISP, closed below its offer price of $16.95 at 15, despite a place in the hot foreign issues market that in recent months has been embraced by investors hoping to catch Internet fever as Net penetration grows abroad.

Adding to the pressure on these stocks, the IPO pipeline is full. Some 256 deals are currently in registration, according to Thomson Financial. IPO watchers say investors are starting to feel the glut.

"It's hard to sustain momentum with this many issues coming out and each one vying for attention and money," says Randall Roth, senior analyst with

Renaissance Capital's

(IPOSX)

IPO Plus Aftermarket fund. "People are going to get a real shock when they find out IPOs don't always go up and the ride isn't always a smooth and linear one."