Escalating West Asia conflict, weak market sentiments cool IPO momentum

The escalating West Asia conflict and surging crude oil prices weighed heavily on market sentiment, sending Indian equity markets sharply lower on Monday, March 9, as the benchmark indices, the BSE Sensex, and the Nifty 50, fell more than 3 per cent each during the intraday session.

 

The BSE Sensex plunged as much as 2,494 points, or 3.16 per cent, to hit an intraday low of 76,424. Meanwhile, the Nifty 50 dropped 753 points, or 3.07 per cent, to touch an intraday low of 23,697. The Nifty has now fallen more than 10 per cent from its January 2026 peak.

 

 

The negative sentiment in the secondary market has also weighed on the primary market, which saw a record fundraise of nearly ₹1.8 trillion by as many as 102 mainboard companies in 2025. So far this year, 11 mainboard companies have raised ₹14,013.66 crore from the markets. Of these, 10 have already listed on the bourses, while SEDEMAC Mechatronics is slated to make its D-Street debut on Wednesday, March 11, 2026. 

Investor enthusiasm cools

Investor sentiment in the primary market, meanwhile, remains fragile as the last two public offerings, Omnitech Engineering and SEDEMAC Mechatronics, failed to get fully subscribed across all investor categories, though they were fully booked on an overall basis thanks to institutional buyers. 

Omnitech Engineering, which raised ₹583 crore from the markets, was subscribed 1.14 times, largely supported by last-day participation from qualified institutional buyers (QIBs). The retail investor portion was subscribed 2.86 times, while non-institutional investors (NIIs) and employee investors were subscribed 73 per cent and 33 per cent, respectively, according to NSE data.

 

Similarly, SEDEMAC Mechatronics, which raised ₹1,087.45 crore from the markets, was subscribed 2.68 times, driven mainly by QIBs who bid 8.46 times the shares reserved for them. Non-institutional investors and retail investors subscribed only 77 per cent and 20 per cent of their reserved portions, respectively.

 

“So, the way the IPOs have been subscribed, and more importantly their post-listing performance, at least for the time being, it is the end of the road for IPOs. Because at the end of the day, you need subscribers, and subscribers need to see profits on listing. Both of these are not happening. So it is a chicken-and-egg situation,” said Ambareesh Baliga, an independent equity analyst.

 

“If you do not have investors coming to invest, there is no point in having an IPO. We will see a much lesser number of IPOs. Even if companies have got permission or clearance, they still have enough time to launch the IPO. But once you have launched the IPO, it is very adverse to pull it back,” Baliga added. 

 

According to him, companies that already have regulatory approvals may choose to wait for better market conditions before proceeding with their public issues. “People may just sit on the permission and may not really launch the IPO. When the scenario improves, you can possibly see IPOs slowly coming back. Again, the IPOs that come at that point of time, if they start giving returns to investors on listing, then I think it will catch up again,” he said.

 

Baliga said the trajectory of the IPO market would also depend on geopolitical developments and their impact on equity markets. “That is the issue because today everything depends on how the war situation goes. If it stops, then you will see a major run-up in the market and a bounce back. It is going to be a good bounce back in the market. Along with that, you will have a few IPO launches also happening,” he said.

 

“Once those IPOs do well, it is not only a function of the market directly but also a function of how the IPOs perform. If you have the market doing well, IPOs getting launched, and those IPOs doing well, then you will see a decent rush in the market. All those companies sitting on clearances for their IPOs will come one by one. They will wait for the revival in the secondary market as well. You have a time period of one year from the time the IPO is cleared,” he added.   

Post-listing performance a concern

So far, 10 companies have listed on the bourses this year. Of these, only three, Bharat Coking Coal, Amagi Media Labs, and PNGS Reva Diamond Jewellery, are trading above their issue price.

 

The remaining companies, Omnitech Engineering, Shree Ram Twistex, Clean Max Enviro Energy Solutions, Gaudium IVF & Women Health, Aye Finance, Fractal Analytics, and Shadowfax Technologies, are trading below their issue price, according to NSE data.

 

“Basically, the secondary market has been underperforming for a few months now, and that has had an impact on primary market listings. That is the key reason,” said Deepak Jasani, an independent market expert.

 

“But more than that, the greed of promoters and merchant bankers to aggressively price the IPOs is also a factor. That has led to a very minimal margin of safety for new investors. When market sentiment turns downward, it means that investors would make a loss if they exit when prices turn negative,” Jasani added.

 

He also pointed to supply pressures arising from lock-in expiries. “Plus, there are lock-ins of one month, three months, and six months for the sale of shares by anchor investors and pre-IPO investors. At that time, a bulk of supply comes into the market and decreases prices further,” he said.

 

“In that sense, people who want to buy shares after the listing typically wait for the lock-in to get over so that they can get better prices. In this scenario, prices remain depressed even if there are willing buyers in the market, because they are  waiting,” he added. 

Upcoming IPOs

 

Amid this backdrop, the pipeline of upcoming IPOs does not appear very encouraging. According to the latest data, Rajputana Stainless launched its book-built offering on Monday to raise ₹254.98 crore from the markets.

 

Innovision is slated to open its public offering on March 10, through which it aims to raise ₹322.84 crore. Meanwhile, Skyways Air Services is expected to launch its public offering on Wednesday, March 18, 2026.

 

Jasani said companies may delay their offerings if valuations remain a sticking point. “People who are adamant about high valuations will wait it out and postpone their IPOs. People who are willing to come to the market at slightly lower valuations will still try to come out. Whether they succeed or not will depend a lot on the movement of the secondary market at that point of time,” he said.

 

“Having seen the high valuations at which IPOs from similar industries have come in the past one or two years, promoters typically would not want to immediately cut valuations, as this down move has lasted only about two or three months so far,” he added.

 

“Maybe if the markets do not revive for another three, four, or five months, then promoters will probably adjust to lower valuations. Until that time, they will continue to hope for better valuations and postpone their IPOs,” Jasani said.

 

He added that pre-IPO investors could also influence the timing of issues. “There will also be pressure from pre-IPO investors to give them an exit. How they tackle that pressure will also be interesting to see,” he said.

 

For retail investors, he advised caution in the near term. “Retail investors, I think, can broadly stay away from IPOs at this point in time unless the IPO is from a very good, established group and the valuations are not very stretched,” he said.  ==================================================== 

(Disclaimer: The views and investment tips expressed by the analysts in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.)