IPOs worth Rs 77,000 cr put on hold: Geopolitical tensions, lack of support from FIIs force companies to postpone plans, say analysts

As many as 51 companies have postponed their plans of floating IPOs worth Rs 77,000 crore amid Russia-Ukraine war. Around 51 companies were ready to raise Rs 77,000 crore through an IPO after getting approval from market regulator Securities Exchange Board of India (Sebi), as per capital markets researcher at Prime Database.  

This does not include 43 companies which have submitted their IPO documents with the Securities and Exchange Board of India (Sebi) but are yet to get approval. Besides them, Life Insurance Corporation (LIC), which received approval for DRHP only recently, is also not part of the list.  

As per Ravi Singh, Vice President and Head of Research Share India, companies postponed the IPOs as due to volatility in the secondary market.  

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"Current situation in the market and high volatility is likely to continue due to geopolitical tensions and fear of stagflation on account of higher crude and other commodities prices. As the response in the primary market depends on the activities in the secondary market, the extraordinary volatility in the primary market for the last few months has forced the companies to hit a pause button on their respective IPOs," he said. 

Manoj Dalmia, founder and director, Proficient equities Private limited is also of the view that the war situation between Russia and Ukraine has caused many IPOs to come to a halt. 

"The rising crude prices have caused inflationary concerns for companies, whose effect is seen on the stock prices falling. The Major IPO of LIC was expected to launch by March-end but now it would be done in the next fiscal," he says.  

Some IPOs like Go Airlines, API Holdings, Delhivery, Emcure Pharma are planning to raise about Rs 25000 crore, but the market is currently facing sell-offs by FIIs, whose support is needed when such big-ticket size IPOs are involved to create liquidity, Dalmia added.  

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