The National Stock Exchange (NSE) building in Mumbai, India, on Wednesday, Dec. 10, 2025.
Dhiraj Singh | Bloomberg | Getty Images
Global volatility is threatening a pipeline of multibillion-dollar stock market listings in India, the world’s busiest IPO market.
Payments app PhonePe’s move on Monday to halt its listing plans has underscored a growing strain in the country, as investor appetite weakens amid the fallout from the Middle East conflict.
Indian benchmark indices have dropped more than 12% since January, with most of the decline occurring in recent weeks as the Iran war triggers energy and trade supply shocks that risk slowing growth and hurting corporate earnings.
The rupee’s slide against the dollar offers little respite, and foreign institutional investors have sold over $8 billion worth of equities so far this month, per data from securities depository NSDL.
This risk‑off environment has drained liquidity from the primary market and reduced the chances of IPOs securing the premium valuations that made going public attractive, experts said.
Several Indian tech and consumer startups — including Walmart-backed PhonePe, quick-commerce app Zepto, e-commerce retailer Flipkart and hotel chain Oyo — have deferred plans amid valuation mismatches, according to Samir Bahl, CEO of investment banking at Anand Rathi Advisors.
In December, Zepto confidentially filed for an IPO and planned to raise over $1.2 billion of fresh capital. Softbank-backed hospitality startup Oyo did the same in December, according to Reuters.
Oyo and Walmart-owned Flipkart did not respond to emails seeking comment.
In response to CNBC query on its IPO plans, Zepto said it “remains consistent with its previous advisory, subject to market regulations.” As the company has filed for IPO confidentially, it was not clear what the earlier advisory was, but a spokesperson from the company said it plans to launch an IPO around June.
During a phone call with CNBC, a spokesperson from PhonePe reiterated the stance of the company from its note on Monday, which said that the quick commerce company had temporarily paused its IPO listing due to “the current geopolitical conflicts and market volatility.”
Large‑ticket planned IPOs, including those by the NSE, telecoms firm Reliance Jio and SBI Mutual Fund, are expected to proceed “once conditions improve,” said Bahl, adding that “timing and pricing will require careful calibration.”
India’s largest telecom company, Reliance Jio, is planning its IPO for the first half of 2026 and is in the process of appointing bankers, according to a Reuters report. The National Stock Exchange, India’s largest bourse, appointed 20 merchant bankers, it said in a release on March 12.
“Indian IPOs and other fundraising activity has been a function of the market level,” Mahesh Nandurkar, head of research and India strategist at Jefferies, told CNBC’s Inside India on Tuesday.
IPO activity has slowed since the start of the war in Iran on Feb. 28 as investors have lost their appetite, he added.
Global brokerages have also trimmed their expectations: Nomura cut its year‑end Nifty 50 target by 15% from 29,300 in a March 16 note to investors, while on the same date, Citi lowered its forecast to 27,000 from 28,500, factoring in the impact of surging oil prices and supply shocks stemming from Middle East tensions.
The liquidity needed to absorb the mega IPOs is missing, said Shouvik Purkayastha, managing director of investment banking at Nuvama, adding that it is unlikely to return in the “near-term,” in a written response to CNBC.
Retail investors retreat
For the past two years, India’s primary market has been buzzing with activity, topping global charts with 367 IPOs in 2025, according to EY’s Global IPO Trends 2025 report.
But recent poor returns have kept retail and high‑net‑worth investors on the sidelines, experts said.
Eight out of the 11 IPOs that have listed since the start of the year are trading below their IPO price, according to exchange data.
“Retail and HNI investors are shying away from the market,” said Purkayastha, adding that these investors will come back only once returns see sharp improvement.
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Few companies are proceeding with their IPOs due to “immediate funding requirement[s]” for business needs or due to the need to meet regulatory timelines, said Bahl of Anand Rathi Advisors, adding that investor participation has “been relatively muted, particularly from retail investors.”
Even foreign institutional investors, who were exiting from the secondary market last year, invested nearly $1.5 billion in IPOs from January to March of 2025, versus just $820 million this year, per data from NSDL.
This has put domestic institutional investors — buoyed by 60 straight months of positive equity flows from Indian investors — firmly in control of pricing, according to Purkayastha.
Domestic institutional investors are currently setting the price of IPOs by “driving a hard bargain,” he said, adding that they want IPOs to be valued “competitively.”
