After two record-breaking years for IPOs in India, the prospect of a prolonged issuance drought is rapidly materialising on Dalal Street—thanks to the Iran war’s impact on stock market.
Potential IPO candidates now face a challenging environment characterised by heightened market volatility, which is actively denting investor appetite and severely clouding visibility on corporate valuations.
According to data compiled by Bloomberg, Indian companies have raised $1.5 billion in the current quarter from primary offerings, versus $2.3 billion raised during the same period last year.
This contraction is the clearest indicator yet that one of the world’s most vibrant venues for IPOs is decisively cooling. The retreat is compounded by mounting macroeconomic anxieties, including concerns over an impending economic slowdown, relentless foreign capital outflows, and a weakening Indian rupee.
Local stocks are currently lagging their Asian peers following their worst January performance in a decade. The benchmark NSE Nifty 50 Index slipped as much as 2.3% on Wednesday, dragging its year-to-date slump to nearly 7%. The rupee weakened past the 92/dollar for the first time today.
Consequently, several companies have been forced to approach the market with downsized deal structures. Post-listing performance has also been largely lacklustre, adding to the primary market’s woes:
- Six of the nine mainboard IPOs completed so far this year are currently trading below their offer prices.
- Clean Max Enviro Solutions Ltd., which debuted on Monday, is already trading approximately 20% below its IPO issue price.
Upcoming IPOs in India
Despite the overarching gloom, deal activity has not completely ground to a halt. A select pipeline of offerings is braving the volatility to test the waters:
- Sedemac Mechatronics Ltd. opened a ₹1,352-crore IPO on Wednesday.
- NHAI InvIT’s ₹6,000 crore IPO will open on 11 March 2026.
- Bagmane Prime Office REIT plans a ₹4,000 IPO this month.
- Rajputana Stainless Ltd. is set to launch a smaller IPO on 9 March.
Elsewhere, PhonePe is targeting a smaller valuation of $9-10.5 billion in its IPO much later this year. Those plans could also change, if Iran war’s impact on the stock market is sustained.
Iran war impact on India’s stock market
Foreign institutional investors (FIIs) present a complex narrative. They have injected nearly ₹7,000 crore into IPOs this year, suggesting a targeted, selective appetite for primary offerings. Conversely, they have aggressively offloaded shares worth about ₹21,200 in the broader secondary market.
While the immediate outlook remains clouded, bankers suggest that prolonged delays in the IPO pipeline may be unlikely if market volatility eases.
The stock market tends to price in geopolitical developments and shifting realities rapidly. Once greater macroeconomic clarity emerges, institutional confidence is expected to return, paving the way for dealmakers to resume activity.
