The risk comes at a time when India’s primary market has already had a muted start to 2026 after two record years for listings. Data compiled by Bloomberg shows companies raised about Rs 16,000 crore, through IPOs in the first quarter of 2026, compared with Rs 19,000 crore, during the same period last year.
Listing performance has also been weak. Of the last nine mainboard IPOs, seven debuted with negative listing gains, indicating a cautious mood among investors amid the recent correction in equities.
Analysts say rising geopolitical risks, including the Iran conflict, are amplifying volatility in global markets and forcing companies to reassess the timing of their public offerings. A recent example is PhonePe, which decided to defer its IPO plans citing geopolitical uncertainty and market instability.
According to an ET report, investors were also pushing for a lower valuation than the company’s previously discussed $15 billion, showing pressure that volatile markets can exert on pricing expectations. If things don’t stabilise in the next few months, analysts say similar valuation challenges could emerge for several high-profile listings expected in the coming months.
Among the largest potential offerings is Jio Platforms, the telecom arm of Reliance Industries, which is preparing what could become India’s biggest-ever IPO.
The company is working with multiple banks for the offering, which could value Jio at as much as $170 billion, according to earlier estimates. At the minimum 2.5% public shareholding requirement recently permitted by regulators for large issuers, the company could raise roughly $4.3 billion (nearly Rs 40,000 crore) through the sale.Another closely watched listing is Flipkart, the e-commerce company controlled by Walmart Inc. Flipkart recently shifted its holding company structure to India from Singapore, a move widely seen as preparation for its domestic listing. The company was last valued at about $37 billion in 2024 when Alphabet Inc invested $350 million.
Asset management company SBI Funds Management, backed by State Bank of India and Amundi SA, is also considering an IPO that could raise as much as $1.2 billion in the first half of 2026. Such a listing would provide public market investors direct exposure to India’s rapidly expanding mutual fund industry.
Meanwhile, quick commerce firm Zepto had previously filed confidential papers for an IPO expected to raise around Rs 11,000 crore, though analysts say companies in high-growth sectors may be particularly sensitive to shifts in valuation sentiment.
The broader challenge for issuers is that volatile markets typically reduce investor appetite for new listings. When benchmark indices correct sharply, investors often prefer to deploy capital into beaten-down large-cap stocks rather than participate in IPOs perceived as riskier.
Khushi Mistry, research analyst at Bonanza Portfolio, had earlier said the slowdown reflects changing investor sentiment. “Market corrections in broader and midcap indices have eroded investor risk appetite. Investors are prioritising averaging down existing holdings over new subscriptions. Muted activity may persist until secondary markets stabilise,” she said.
Uday Patil, executive director at PL Capital Markets, said companies are increasingly cautious about launching offerings in the current environment. “Secondary market volatility and valuation concerns have weakened investor appetite. Companies hesitate to launch new IPOs anticipating poor reception. The lull is not structural, it is time-based,” he said.
Investment bankers say the IPO pipeline remains strong despite the current slowdown. According to Bhavesh Shah, managing director and head of investment banking at Equirus Capital, the current slowdown is largely sentiment-driven rather than structural.
“The slowdown in IPOs is not structural but due to subdued sentiment in the secondary market,” Shah said. “Companies are preferring to take a more tactical approach on whether to proceed or hold back, and investor sentiment has made issuers more calibrated about launch windows and pricing.”
For now, bankers expect many companies to closely watch market conditions before moving ahead with their offerings, especially as geopolitical tensions continue to drive volatility in global equities and commodities.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)