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The once-booming initial public offerings (IPO) market, fueled by frenzied retail participation, has hit a speed bump. The recent sell-off in Indian equities has forced companies to defer listings, with March seeing no mainboard public listing, the first monthly lull since May 2023. Despite five consecutive months of decline, particularly the nearly 6% Nifty drop in February due to global trade tensions, rising bond yields, and persistent foreign portfolio investor (FPI) outflows, a market rebound in March offers a potential silver lining.
The Nifty rose 6.3% as FPIs resumed buying in the latter half of the month, though they remained net sellers overall. This recovery, coupled with the resurgence of qualified institutional placements (QIPs), has sparked optimism.
Notably, several public sector banks, including Indian Overseas Bank, Bank of Maharashtra, Central Bank of India, Punjab & Sind Bank, and UCO Bank, are now pursuing QIPs to meet minimum public shareholding norms, further bolstering fundraising momentum.QIPs allow publicly traded companies to raise funds for projects or capital needs by issuing securities to qualified institutional buyers. However, rising volatility poses a challenge to fundraising efforts.
"During volatile phases, IPO activity tends to remain subdued, mirroring trends in the QIP market," noted Pranav Haldea, managing director at Prime Database. He added further that QIPs and IPOs always see traction in bullish markets. "Late March saw renewed QIP activity, with three public sector banks entering the market.
As some bullishness returned, companies tested investor appetite with smaller issuances. If the bullishness persists into April or even if markets stabilize, we could see some IPO activity, given the strong pipeline." Also Read: Fundraising activities are strongly correlated with market movements: QIPs surge during bullish phases, pulling IPOs along.
Conversely, market downturns freeze fundraising. "In strong markets, both IPOs and QIPs thrive, but QIPs react quicker—pricing and execution are faster," explained Yatin Singh, chief executive officer of Investment Banking at Emkay Global. The fiscal year 2021, marked by a 78% surge in the Nifty, saw 30 mainboard IPOs raising 31,267 crore and QIPs totalling 78,045 crore.
In contrast, the fiscal year 2023, with a 1.75% decline in the Nifty, witnessed a dramatic drop in the amount raised through QIPs to 9,018 crore and a significant decrease in IPO counts. The fiscal year 2025 witnessed a historic surge in capital-raising activity.
Institutional investors deployed 1.3 trillion across 85 QIP issuances, doubling 2023-24’s 69,306 crore mobilization. It also turned out to be a record-breaking IPO year, with 78 mainboard offerings mopping 1.
62 trillion, more than double the previous year’s mobilization of 61,922 crore from 76 IPOs. However, there was a trend reversal in early 2025 as the market turned choppy. The number of QIP issuances declined to seven in the first quarter of 2025, down from 21 in the same period last year.
The IPO activity also slowed, with only nine mainboard IPOs in the first three months of 2025, compared to 22 during the same period a year ago, according to Prime Database. The market correction intensified amid rising global uncertainty and sustained FPI outflows. Although March saw a rebound, the question remains whether it is sufficient for fundraising activities to resume.
“Over the last three to four months, the market has been down, and a single week of recovery in March isn’t enough to change much. In one week, no company is likely to launch an IPO or QIP because investors don’t expect a sharp bounce back. Companies looking to raise funds through QIPs or IPOs will likely wait longer, especially since there's no clear indication that the market will recover within the next one to two months," said Siddharth Bhamre, head of research of Asit C.
Mehta Investment Intermediates. Also Read: QIBs are really quick to react to the market. "QIBs are highly sensitive to market conditions—when the market declines, QIP activities will completely stop, though we might still see some IPOs," said Bhamre.
He further explained, for example, if a stock is trading at 200 per share and a QIP is launched at 170 (a 15% discount), a market correction could wipe out that discount within days, making QIPs less appealing in volatile markets. On IPOs, Haldea further added that since they are once-in-a-lifetime events for a company, they would rather let their approval lapse than launch in a volatile or bearish market. Meanwhile, the IPO pipeline remains robust, with 49 Sebi-approved firms set to raise 84,000 crore, while 67 more await clearance to raise 1.
02 trillion. Despite the current market volatility, a strong pipeline of upcoming issuances and record-high systematic investment plan (SIP) inflows suggest a less pessimistic outlook. “It’s crucial that investors shouldn’t be chasing momentum right now; rather they should find solace in fundamentals.
I’m inclined to believe that India’s capital markets are now driven by depth, discipline, and long-term conviction," said Abhishek Jaiswal, fund manager at Finavenue. Furthermore, recent regulatory changes by the Securities and Exchange Board of India (Sebi) are expected to facilitate fundraising. The regulator has doubled the threshold for mandatory granular disclosures by FPIs from 25,000 crore to 50,000 crore in equity assets under management (AUM).
Experts remain optimistic about market prospects. Also Read: “The primary and secondary markets will witness strong issuance flows, including QIPs and IPOs. This is merely a phase of a market correction, where excess froth is settling.
Sustainable businesses—especially sector leaders and top contenders—will continue to attract funding. While there may be a brief pause as investors reassess portfolios, issuances are expected to regain momentum, with a surge in IPOs likely from June onwards," said Nipun Lodha, director of corporate finance at PL Investment Banking..
