Global Volatility Hits India’s IPO Market
On December 10, 2025, at the National Stock Exchange (NSE) in Mumbai, India, concerns over global market instability are putting pressure on the multibillion-dollar IPO landscape in one of the busiest markets worldwide.
Recent moves, such as the cancellation of PhonePe’s planned IPO, highlight growing anxiety among investors, particularly as geopolitical tensions in the Middle East evolve. The benchmark index in India has dropped over 12% since January, with considerable declines occurring recently, driven largely by the fallout from ongoing conflicts that are disrupting energy supplies and trade.
Foreign institutional investors have sold over $8 billion in stocks this month, indicating a widespread retreat from the market, as reported by securities depository NSDL. This “risk-off” environment has tightened liquidity in the primary market, making it less likely for new IPOs to achieve desirable valuations, according to analysts.
Several startups, including PhonePe, quick-commerce firm Zepto, online retailer Flipkart, and hotel chain Oyo, have paused their IPO initiatives amid valuation concerns, as pointed out by Sameer Bahl, the CEO of investment banking at Anand Rathi Advisors.
Zepto had quietly filed for an IPO in December aiming to raise over $1.2 billion. Reports suggest similar intentions were in play for Oyo, which is backed by SoftBank.
Oyo and Flipkart did not provide comments when approached. Zepto, however, mentioned that it is staying aligned with previous guidance while adapting to market conditions, though the specifics remain unclear. The company tentatively aims for an IPO launch around June.
Meanwhile, a PhonePe spokesperson confirmed via CNBC that the company has suspended its IPO plans due to “current geopolitical conflicts and market volatility.” Bahl expressed optimism that upcoming IPOs from firms like Reliance Jio and SBI Mutual Fund could proceed once the situation stabilizes, although careful timing and pricing adjustments will be necessary.
Reliance Jio, India’s leading telecom company, plans to launch its IPO in early 2026. Reports indicate that the NSE has appointed 20 merchant bankers for this purpose.
Mahesh Nandurkar, head of research and strategist at Jefferies, noted that market trends heavily influence India’s IPO and fundraising activities and that investor enthusiasm has diminished since the onset of the Iran conflict.
Global brokerages are also adjusting their forecasts, with Nomura reducing its year-end target for the Nifty 50 index significantly. Revised projections take into account disruptions from rising oil prices stemming from regional tensions.
Withdrawal of Individual Investors
Despite a booming market attracting numerous IPOs over the past couple of years, experts assert that recent poor returns have driven retail and high-net-worth investors away. Of the 11 IPOs launched this year, eight are currently trading below their initial offerings.
Purkayastha noted that investors are likely to remain on the sidelines until clearer returns emerge. Few companies are moving forward with IPOs beyond the immediate need for capital or compliance with regulatory schedules, as low participation, especially among retail investors, hampers the market.
Foreign institutional investors, who had pulled out of the secondary market, invested approximately $1.5 billion in IPOs from January to March 2025 but only about $820 million this year, per NSDL data. Consequently, domestic institutional investors have started to gain traction, showing inflows for several months and maintaining tight control over pricing.
Currently, domestic institutional investors are pushing for competitive valuations, making it essential for IPOs to be attractively priced to regain broader investor interest.
