Primary market shows signs of revival even as uncertainty looms

The primary market has been showing early signs of revival with the successful fundraise of ₹9,800 crore by the SBI Funds Management and a rush of mid-sized IPOs to hit the market before September. However, global uncertainty remains a key factor to be watched.

The capital market regulator, SEBI, in April extended the one year validity of IPO observation letters expiring between April 1 and September 30 to uniformly until September-end.

In all, there at least 14 companies are waiting in wings to raise ₹28,033 crore in next two months, with the largest being Manipal Hospitals and Zepto together eyeing fundraises of ₹17,510 crore.

In fact, ahead of September deadline, eight companies are in the market to raise less than ₹500 crore each.

Payal Pandya, Vice-President, Bajaj Broking Research said, there was a sharp rebound in primary market in July with healthy demand underscoring improving risk appetite despite lingering macroeconomic uncertainties.

Nevertheless, the primary market movement will be dictated by better earnings season, the geopolitical tension and potential impact of US tariff measures, she added.

Tanvi Kanchan, Associate Director, Anand Rathi Shares and Stock Brokers, said the sustained mutual fund inflows has created a deep reservoir of capital that supported new issues regardless of global volatility.

The pipeline of high-quality, large-format issues like Reliance Jio and NSE may draw retail back, but smaller and mid-sized IPOs will struggle to find that support in a risk-off environment, she said.

Rajesh Singla, CEO Alpha AMC, said companies and bankers are recalibrating their approach to listings by trimming issue sizes, conservative pricing and lowering ‘offer for sale’ component in favour of larger fresh issue portions.

A pipeline of 143 companies holding active SEBI approvals gives enough raw material for a busy second half, but whether it translates to a genuine revival depends on secondary market stability holding and FII appetite returning to large-cap issuances, he said.

Nandish Shah, AVP-PCG Research & Advisory, Wealth Management, Motilal Oswal Financial Services, said the September 30 regulatory deadline requiring SEBI-approved IPO companies to either launch their offerings or refresh financial disclosures has accelerated filing timelines, compelling companies to move forward with their public offerings.

Industry estimates suggest India could collectively raise nearly $20 billion ( ₹1.94 lakh crore) through IPOs in 2026, with about $8-9 billion from about 4 major offerings, he said.

Akshay Gupta, Director, Prime Securities, said the liquidity conditions have improved sentiments with falling government bond yields and a stable rupee besides strong international and domestic capital flows.

However, he said rising crude and diesel costs from West Asia/Europe conflicts along with oil marketing companies already reporting over ₹1.8 lakh crore in under-recoveries in Q1FY27 can be a potential drag on sentiment.

Shrey Jain, CEO, Stocko by InCred Money, said nearly 250 companies are waiting to raise over ₹4 lakh crore from the primary market though issuances have been slow so far given geopolitical factors and macroeconomic conditions.

Any move of supply significantly exceeding demand in the primary market, could lead to some weakness in the market and depress valuations or push some IPOs further down the pipeline, he said.