Bearish market sentiments drag down primary issuances

Bearish sentiment in the secondary market has weighed heavily on primary issuances, with just three companies raising ₹4,765 crore in January compared to 10 companies garnering ₹21,858 crore in December.

The primary market rally had already begun tapering in the December quarter. Excluding the ₹10,603-crore IPO of ICICI Prudential Asset Management Company and ₹5,421-crore issue of Meesho, December’s fund-raise would have been a modest ₹5,834 crore.

In November, nine companies had raised ₹23,617 crore, led by large IPOs such as PhysicsWallah (₹3,480 crore), PineLabs (₹3,900 crore) and Billionbrains Garage Ventures (Groww) (₹6,632 crore).

October was even stronger, with eight companies raising ₹37,459 crore, boosted by Tata Capital (₹15,511 crore), LG Electronics (₹11,607 crore) and Canara HSBC Life Insurance (₹2,517 crore).

retail confidence hit

Apart from bearish market sentiment, the underwhelming post-listing performance of recent IPOs and the absence of bumper listing gains have dampened investor enthusiasm.

Uday Patil, Executive Director, PL Capital Markets, said IPO buoyancy is closely tied to broader market performance. Subdued post-listing returns have made investors cautious, denting retail confidence. Many mid- and small-cap IPOs — traditionally strong retail draws — have seen sharper corrections, eroding risk appetite.

Sunil Nyati, MD, Swastika Investmart, noted that after record fundraising in 2024–25, mid- and small-cap stocks have undergone a meaningful correction, shaking investor confidence. In such conditions, investors prefer deploying capital in beaten-down listed stocks rather than committing fresh funds to new issues. As a result, several firms are deferring listings until stability returns and valuations improve.

Valuation concerns

Sonal Minhas, Founder, Prescient Capital, said the median and average trailing twelve months (TTM) P/E of companies listed since January 2025 stand at 30.2 times and 42.5 times, respectively — levels many companies have struggled to justify post listing.

Despite healthy corporate earnings, sustained selling by foreign portfolio investors — driven by India’s relatively low AI exposure, elevated valuations and better growth prospects in other emerging markets — has added to macro pessimism and further pressured the primary market.

Published on February 14, 2026