Three Sebi-cleared financial IPOs worth ₹3,700 crore remain unlaunched as bankers conduct extended investor education roadshows to compensate for the absence of listed domestic peers. Asset Reconstruction Co. (India) Ltd, alternatives investment company EAAA India Alternatives Ltd, and private equity firm Gaja Alternative Asset Management Ltd have not launched their share sales despite obtaining regulatory clearance months ago. According to Mint, Arcil and EAAA are looking at IPOs of up to ₹1,500 crore each, while Gaja is looking at an IPO of around ₹700 crore. The delays are partly due to multiple rounds of meetings where merchant bankers explain business models to institutional investors accustomed to commercial banking and NBFCs. As one merchant banker noted, "The challenge is the absence of listed domestic peers. A portion of the roadshows is dedicated to baseline education rather than financial performance or valuation metrics."
India's mainboard IPO market experienced a complete freeze in May 2026, marking the first month without any mainboard IPOs since March 2025. According to Prime Database data, this represents a dramatic reversal from the record-breaking performance of FY26, when Indian companies raised ₹1.78 trillion through mainboard IPOs, surpassing the previous peak of ₹1.62 trillion in FY25. The slowdown has been particularly sharp, with mainboard fundraising peaking at ₹45,187.66 crore across 10 IPOs in October 2025, before declining to ₹21,858 crore across 10 IPOs in December and further weakening in 2026. As reported by Anand Rathi Advisors, the Nifty 50 dropped to 22,331 on the last trading day of FY26, with cumulative losses of 7% from the start of the Iran-US war, while 51 approved issuers have deferred listings due to timing rather than poor fundamentals.
Despite the mainboard freeze, India's small and medium enterprise (SME) segment has demonstrated remarkable resilience, continuing to attract investor interest even during geopolitical uncertainty. According to Prime Database data, SME IPOs raised a record ₹10,955.1 crore in FY26, compared with ₹9,119.9 crore in FY25. In May alone, 17 SME companies raised ₹733 crore, following strong performance in previous months with ₹865 crore raised in January, ₹619 crore in February, and ₹387 crore in March. As noted by Anand Rathi Advisors, sustained SME IPO activity reflects investor appetite for high-growth companies with manageable issue sizes, with smaller offerings in the ₹10-100 crore range still finding demand when large-ticket issues struggle for timing and valuation comfort.
Foreign portfolio investors have shown subdued appetite for Indian IPO markets in recent months, with global institutional participation experiencing a significant decline. According to data analyzed by Mint, global institutional anchoring for domestic initial public offerings has seen a 40% year-on-year decline in the first five months of 2026. Foreign portfolio investors, who commanded 42% of the qualified institutional buyer allocation in mainboard IPOs between January and May 2025, saw their share retreat to just 25% this calendar year. As reported by Mint, Ramesh Srinivasan, managing director and chief executive of Kotak Investment Banking, noted that foreign institutional investor appetite is "a little muted in the primary market, but pretty good when it comes to follow-ons, sell-downs and QIPs." The geopolitical tensions have created additional headwinds, with foreign investors grappling with high relative valuations and massive distraction from the global artificial intelligence boom.
The current market environment reflects a fundamental shift from excess to selectivity, as investors recalibrate expectations after two record-breaking years. According to Harshal Dasani, business head at INVasset PMS, "After two record years, markets had priced perfection into many new issues. Once volatility, crude uncertainty and West Asia risks rose, weak demand disappeared first." Despite the primary market slowdown, the issue pipeline remains robust with IPOs worth more than ₹2.4 trillion already receiving SEBI approval, while another ₹1.5 trillion are waiting for clearance. However, weak post-listing returns have impacted retail and HNI sentiment, with around two-thirds of 2026 IPO listings currently trading below their issue price and average listing gains falling to about 8%, the lowest since 2019 and sharply below the 49% seen in 2024. The widening gap between private-market valuations and public-market realities has already forced some prominent IPO-bound firms to retreat, with Moneycontrol reporting that digital payments giant PhonePe deferred its $1.3 billion IPO due to steep valuation mismatch with domestic institutional investors.
Despite reduced IPO interest, foreign investors are finding opportunities in alternative investment channels. According to Mint, a total of ₹1.1 trillion has changed hands in open-market trades this year as of 15 April, up over 25% from ₹86,810 crore a year earlier. Notable secondary-market transactions included Adani Ports and Special Economic Zone Ltd's ₹7,486 crore secondary sale on 4 May, Tencent's ₹805 crore block deal exit from PB Fintech Ltd on 9 May, and Billionbrains Garage Ventures Ltd's ₹5,326 crore offering followed by One97 Communications Ltd's ₹964 crore sale on 22 May. Major institutional buyers included US-based Capital Group, Societe Generale and Morgan Stanley, BlackRock and Abu Dhabi Investment Authority, and Citigroup and Goldman Sachs. The marketing syndicates for the three financial firms are continuing institutional roadshows, focusing mostly on domestic mutual funds, though some are more sporadic than others.
