Market experts are raising concerns about a potential slowdown in initial public offerings (IPOs). Despite a healthy number of filings, factors such as market volatility, increasing US interest rates, and Trump tariffs have created uncertainty for issuers, bankers, and investors, particularly global funds.
According to Venkatraghavan S, Managing Director of Investment Banking at Equirus, the IPO market may experience a temporary slowdown driven by volatility. Foreign participation, especially in issues exceeding ₹3,000 crore, is critical, but global funds have been selling off in recent months, impacting their interest in the Indian market.
Pranjal Srivastava, Partner at Centrum Capital, highlighted the impact of rising US rates and Trump’s policies on IPO launches. The uncertainty caused by these factors could make it less attractive for foreign funds to invest in the Indian market.
While IPOs saw significant investments from overseas investors in the last quarter, the recent market conditions have led to a pullout of funds from the secondary market. This trend could affect the willingness of foreign investors to participate in future IPOs.
In terms of valuations, issuers are assessing how Trump’s policies might affect their businesses. Sectors dependent on the US for revenue or raw materials could face challenges, leading to more conservative IPO valuations in the mid and small-cap space.
Pranav Haldea, Managing Director of PRIME Database, predicts a potential pause in larger IPO launches that rely heavily on overseas investor support. While the IPO pipeline remains active, larger issuances may face a delay until market conditions stabilize.
Despite the challenges, experts believe in the resilience of the Indian market. Once the current volatility subsides, IPO activity is expected to pick up again. The long-term attractiveness of the Indian market remains, and investor interest is likely to endure unless there is a significant economic slowdown.
