Market volatility has had a negative impact on companies that recently went public, with half of the 100 companies that listed on the mainboard since last year currently trading below their offer price, according to data from PRIME Database. Sixteen of these companies have seen their market value decrease by over a third. Among the top losers are Popular Vehicles & Services, Carraro India, and Godavari Biorefineries, which have experienced stock declines of 67 per cent, 55 per cent, and 55 per cent respectively.
In February, only three IPOs were launched, compared to six in January and 15 in December, signaling a slowdown amid a volatile secondary market where the Nifty has dropped over 14 per cent from its all-time highs. Factors such as sustained selling by overseas investors, concerns related to the US market, global geopolitical tensions, fluctuating interest rates, and a tighter monetary environment have made investors more cautious.
According to a note by Bajaj Broking Research, companies have been delaying their IPO plans due to high valuations, strict SEBI regulations, and market uncertainty. However, the IPO pipeline remains robust, with 47 companies having received regulatory approval and another 68 awaiting approval to potentially raise ₹1.82 lakh crore. Despite the current slowdown, IPO activity could pick up in the second half of the year if market conditions stabilize and interest rates soften.
In the past two months, 43 companies have filed for IPOs, and 30 out of the 47 companies that have received regulatory approval in the last three months still have nine months to launch their IPOs. Companies are waiting for improved market conditions to ensure better pricing and investor participation before proceeding with their public debut.
