Indian Startups Delay IPOs Amid Market Volatility and Geopolitical Tensions
Startups go slow on Dalal Street debut as conflict roils investor appetite
The Times Of India
Image: The Times Of India
Indian startups are postponing their IPO plans due to geopolitical tensions, particularly the US-Iran conflict, leading to a slowdown in listings on Dalal Street. Companies like PhonePe and Flipkart are delaying their IPOs, while only six new-age firms have gone public this year, with many facing lower returns for investors.
- 01Only six new-age companies have listed in 2023, with four of them below their issue price.
- 02The total amount raised from mainboard IPOs this year is under ₹20,000 crore (approximately $2.4 billion USD), significantly lower than previous years.
- 03Market regulator Sebi has extended the validity of IPO approvals by six months due to the tough market conditions.
- 04Investor sentiment has become more selective, leading startups to reassess their IPO timelines.
- 05Major companies are unlikely to proceed with IPOs unless there is a clear investor appetite for larger issues.
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The Indian IPO market is experiencing a slowdown as startups face challenges in launching their public offerings amidst geopolitical tensions, particularly due to the ongoing US-Iran war. Companies such as PhonePe, which planned a $1.3 billion IPO, and Flipkart are delaying their listings, reflecting a cautious approach in a volatile market. So far, only six new-age firms have gone public this year, with four of them listing below their issue prices, indicating a decline in investor returns compared to previous years. The total funds raised from mainboard IPOs in 2023 is under ₹20,000 crore (approximately $2.4 billion USD), a stark contrast to over ₹27,000 crore raised in each of the past two years. The Securities and Exchange Board of India (Sebi) has extended the validity of IPO approvals to provide companies with more time to navigate these challenging conditions. As investor sentiment shifts towards selectivity and value sensitivity, many startups are reassessing their timelines and strategies before entering the public markets.
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The slowdown in IPOs may lead to reduced investment opportunities and lower returns for investors in the Indian market.
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