India’s primary market is currently going through a balanced yet cautious phase. After years of record fundraising, geopolitical tensions and weak listing performance are now weighing on investor sentiment. This has made it difficult for companies to achieve favourable valuations, even as a strong pipeline continues to indicate future opportunities.
Let us understand this slowdown in India’s IPO market in detail and assess whether this phase presents a challenge or an opportunity for investors.
What’s Happening?
India’s IPO market, which saw record fundraising over the past two years, is now expected to slow down in FY27. The key reasons include geopolitical tensions, elevated valuations, and weak listing performance, all of which have dented investor confidence.
Rising conflicts in West Asia have disrupted oil supply, pushing the price of the Indian crude basket from $69 per barrel in February to $110.63 per barrel on 16 April. This has added pressure on equity markets, with the Nifty 50 falling 7.5% from its peak of 26,328.55 on 2 January to 24,353.55 on 17 April.
Foreign institutional investors (FIIs) made a record withdrawal of $13.6 billion in March and have pulled out an additional $6.24 billion so far in April. These factors have made it difficult for companies to secure favourable valuations, leading to the postponement of several public issues.
Impact of Geopolitical Tensions on the Market
Geopolitical uncertainty has increased market volatility, prompting companies to adopt a cautious approach. Fintech major PhonePe has postponed its IPO plan worth Rs 12,000–13,000 crore, while five jewellery companies have deferred IPO plans worth a combined Rs 3,840 crore. Recent listings have also delivered weak performance: Central Mine Planning and Design Institute declined 10.43% on debut, Shadowfax Technologies closed 11.31% lower, and Fractal Analytics ended 5.87% down.
Investors are now prioritising free cash flow, earnings visibility, and strong fundamentals, while promoters continue to anchor expectations to bull market valuations. This has created a mismatch in pricing. To provide flexibility, SEBI has allowed companies to reduce IPO size by up to 50% until 30 September 2026 without refiling draft papers.
To understand this in detail, read our article on SEBI’s new 50% IPO size flexibility rule.
IPO Fundraising Outlook for 2026
IPO activity remained muted this week, with only one public issue launched. However, overall fundraising in 2026 is still expected to remain strong. YTD 20 companies have raised $2.5 billion. Large companies such as Jio Platforms, National Stock Exchange, Zepto, PhonePe, Manipal Hospitals, and SBI Funds Management are preparing to launch IPOs, which together could raise approximately Rs 1 lakh crore ($10.8–10.9 billion).
Overall, fundraising of around $21–25 billion is possible in 2026, even if the number of deals declines. For context, 94 IPOs raised $21–23 billion in 2024, while 115 IPOs raised a similar $21–23 billion in 2025. In the pipeline, 144 companies have approvals worth Rs 1.75 lakh crore, and 63 companies are awaiting clearance for Rs 1.37 lakh crore.
What Does This Mean for Investors?
For investors, this phase presents both challenges and opportunities. Despite market volatility, large and well-backed companies like Jio Platforms (Rs 35,000 crore to Rs 50,000 crore) could emerge as attractive investment options. Investors are increasingly adopting a selective approach, with a sharper focus on quality and earnings visibility. Pre-IPO placements are also helping companies raise capital while offering a visibility window of 6–18 months before listing.
Alternative investment funds (AIFs), family offices, and special situations funds are increasingly partnering with traditional investors, helping bridge the valuation gap. Despite ongoing AI-led disruptions in the technology sector, consumer-tech and fintech offerings continue to be viewed as key India exposure plays. Overall, this environment favours investors who prioritise fundamentally strong businesses with a long-term perspective.
What’s Next?
Going ahead, the trajectory of the IPO market will largely depend on geopolitical stability and recovery in the secondary markets. Valuation corrections could help create a healthier base for future issuances. While the number of deals may decline, larger-sized IPOs could keep total fundraising broadly in line with previous years. Companies are also likely to stay prepared to tap short windows of market stability. If global tensions ease, primary market activity could regain momentum. Overall, 2026 could still turn out to be a strong year for fundraising, provided investors remain focused on quality.
Disclaimer: This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. The companies mentioned are cited as examples within the context of market developments. Investors are advised to conduct their own due diligence and consult their financial advisor before making any investment decisions.
Investments in the securities market are subject to market risks. Read all related documents carefully before investing.
