India’s once-vibrant initial public offering (IPO) market is facing a chilling slowdown. According to Prime Database, a staggering 144 companies with proposed public issues worth ₹1.47 lakh crore are currently stuck in limbo. Out of these, 67 companies are still waiting for the Securities and Exchange Board of India (SEBI) to grant approval, effectively freezing their plans.

The freeze reflects the growing uncertainty in India’s primary markets. During January and February 2025, Indian markets witnessed just ₹16,000 crore being raised through 10 mainboard IPOs. That’s a sharp 37% drop compared to December 2024. March 2025 marked a further low point, with zero IPOs hitting the market—a complete standstill that has raised concerns among stakeholders.

Scaling Down, Holding Back

Several top-tier companies have been forced to rethink or scale back their IPO plans due to multiple challenges ranging from regulatory bottlenecks and valuation pressures to market volatility.

• Ather Energy, a key player in India’s electric vehicle market, originally intended to launch a ₹4,000 crore IPO. However, due to a steep valuation cut—from ₹20,000 crore to about ₹12,800 crore—the company has now revised its IPO to ₹3,000 crore. Two updates to the draft red herring prospectus (DRHP) have already been filed, pushing the tentative launch to late April 2025.

• Urban Company, another unicorn, has taken an even more drastic step. Aiming initially for a ₹3,000 crore raise, the company has slashed its IPO size by 80% to just ₹500 crore. While it hasn’t yet filed its DRHP, insiders confirm that the launch is still scheduled for late 2025.

• In contrast, Milky Mist is sticking to its ₹2,000 crore IPO plan, thanks to a healthy ₹50 crore net profit in FY24. However, to guard against valuation pressures, the company is going through a pre-IPO funding round to strengthen its financials and market standing.

• LG Electronics India has paused its massive ₹15,000 crore offer-for-sale IPO due to global macroeconomic concerns and waning investor confidence. This was once touted to be among India’s biggest consumer listings.

• JSW Cement has postponed its ₹4,000 crore IPO to July 2025, while Zepto, the Y Combinator-backed quick-commerce platform, is working through pre-IPO funding and a valuation recalibration. Zepto is now aiming for a Q3 2025 launch.

• Tata Capital, whose ₹15,000 crore IPO was highly anticipated, has also delayed its timeline due to the uncertain market environment.

Regulatory Scrutiny Adds to the Freeze

This IPO chill isn’t just a result of investor sentiment or global headwinds—it’s also tied to tighter regulatory scrutiny. SEBI’s Market Infrastructure Institutions (MII) framework has introduced new compliance protocols and extended timelines that companies now need to navigate.

For instance, NSDL, which was gearing up for its IPO, is now facing delays due to the need to update financial disclosures and obtain MII-related approvals. SEBI has set a new IPO deadline of July 31, 2025, for NSDL to comply.

These delays signal that regulatory processes are becoming more rigorous. While this is a welcome move for strengthening corporate governance and transparency, it has also made IPO readiness more complex.

Investors Turn Risk-Averse

Investor caution has also played a significant role in the current freeze. With interest rate cycles uncertain, global inflation still a concern, and geopolitical tensions affecting capital flows, both institutional and retail investors are hesitant to deploy capital into new and untested issues.

While the real estate and hospitality sectors are showing relative resilience (as highlighted by recent and upcoming IPOs like Prestige Group, Juniper Hotels, and The Leela), tech and consumer-facing sectors are finding it tougher to garner interest.

Even qualified institutional placements (QIPs) and pre-IPO rounds are becoming selective, with investors demanding more favourable entry valuations and clarity on business models.

Way Forward: Clarity Needed

Until India sees improved macroeconomic clarity, including stable interest rates, stronger global trade, and improved domestic investor confidence, the once-bustling IPO market may continue to see limited action.

Companies now face a balancing act—restructuring their IPO plans, satisfying SEBI’s updated frameworks, and ensuring that their valuations align with investor expectations.

As of now, the dream run of IPOs that India witnessed in 2021 and parts of 2023 looks like a distant memory. But market experts believe that a turnaround could still be in sight—possibly in the second half of FY25—if global and domestic conditions stabilise.

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