The IPO-bound firms felt a relief after the Securities and Exchange Board of India (Sebi) granted a one-time relaxation by extending the validity of IPO observation letters expiring between 01 April and 30 September 2026, with the new deadline set at 30 September 2026.
The move came against the backdrop of ongoing geopolitical tensions and subdued investor participation, IPO delays and withdrawals which have made it difficult for companies to tap the capital markets.
The Sebi extension was also followed by the US President Donal Trump declaration of two-week ceasefire late on 08 April. Trump has temporarily suspended his threat of large-scale strikes on Iran, just hours before his own deadline.
Under existing regulations, issuers are required to launch their public offerings within a specified period after receiving Sebi’s observations, failing which they must refile documents. The regulator noted that companies have faced challenges in mobilising resources, leading to delays, recalibration, or even withdrawal of IPO plans.
Several IPO approvals were set to lapse in the coming months, including those of Veritas Finance, Credila Financial, Hero FinCorp and Greaves Electric Mobility, with issue sizes ranging between Rs 1,000 crore and Rs 5,000 crore.
“Sebi’s extension allows them additional time to retain regulatory approvals without restarting the entire process, saving both cost and effort. Firms can now reassess valuations, strengthen financials and relaunch at more favorable timings. This flexibility improves strategic planning and reduces pressure to list in weak markets,” said Saurabh Jain, Head of Fundamental Research, SMC Global Securities.
Ceasefire & IPO Markets
The ceasefire depends on Iran allowing safe passage through the Strait of Hormuz. Iran has indicated it will permit this within the two-week timeframe and has proposed a 10-point peace initiative. Discussions are anticipated to commence on Friday in Islamabad, Pakistan.
“While the ceasefire is a positive development, a sustainable revival in the primary market will require consistent FPI inflows, stronger domestic institutional participation, and a visible improvement in corporate earnings. Until then, companies should focus on building stronger narratives around growth and governance before approaching the market again,” said Vaqarjaved Khan, Sr. Fundamental Analyst, Angel One.
Iran has agreed to the temporary truce but emphasised that this does not signify the end of the conflict. The agreement for a brief halt is accompanied by a strong reminder that the fundamental problems still persist
Dull IPO Market In 2026
The typical listing premium for 11 key issues since January 2026 stands at merely 2 per cent, compared to 10.6 per cent in 2025 and 49 per cent in 2024. In contrast, six firms with IPO plans of approximately Rs 7,600 crore have already fallen into limbo after their approvals expired.
Approximately 30 per cent of recent IPOs showed negative returns on their listing day, around 65 per cent are priced under their issue price, 67 per cent of listings from April 2025 to March 2026 exhibit negative performance, and the median subscription rate has decreased to 3 times from 28 times in the period of April to December 2025.
“Over the past couple of months, IPO subscriptions have dropped to around 1.5 times to 2.5 times, and listing gains have either been minimal or even negative. No one wants to launch an IPO with that history riding on your back. In such a scenario, going public becomes more about avoiding losses than raising capital effectively,” said Manoj Puravankara, Co-Founder & COO, Atom Prive Financial Services.
Puravankara stated that Sebi extension keeps the IPO pipeline intact so markets do not see a sudden drop in supply and then a sudden surge later purely due to regulatory expiry. “Market readiness should be a factor in making these calls in such uncertain geopolitical times,” he said.
“The main reason for the recent muted subscription activity and discounted IPO listings is the cautious investors' behavior and aggressive issuer pricing. Even if the sentiment looks to be returning, it's likely to be selective about which companies to invest in,” said Piyush Jhunjhunwala, Founder & CEO, Stockify.
Realistic valuations, clear future growth, and solid fundamentals will create the best environment for companies to experience positive listing outcomes, he added.
XED IPO Withdrawal Amid West Asia Crisis
XED Executive Development withdrew its IPO citing delays in customer verification and subdued investor sentiment amid the ongoing US-Israel-Iran conflict.
The company, the first from India’s GIFT City to attempt a public listing, said it would revisit its market debut at a more favourable time. The roughly USD 12 million IPO had received subscriptions for only about 5 per cent of the shares on offer by Monday evening, reflecting weak demand.
“Our decision to withdraw in March was a proactive move to ensure we didn't list in a 'compressed liquidity' environment. Our withdrawal was governance-driven. We did not want our investors to face post-listing price pressure due to external volatility,” said Piyush Agrawal, CFO at XED Executive Development.
Sebi's circular confirms that 'mobilizing resources' is a genuine challenge right now. We chose to protect our valuation and our investors’ interests rather than forcing a listing into a 'subdued' market, he added.
Karthick Jonagadla, MD & CEO of Quantace Research said that Sebi extension matters far more for delayed issuers than for those that withdrew or allowed approvals to lapse. He said, “This is a useful regulatory bridge, not a reopening of IPO demand.”
IPOs Road To Recovery Ahead
Sebi has maintained validity for about 40 issuers aiming for over Rs 43,500 crore, including 13 major entities with close to Rs 18,000 crore facing imminent deadline pressure. However, reflecting the IPO performance in 2026, investors are skeptical about the IPO market recovery going ahead.
“The recovery is likely to be gradual rather than immediate, as institutional investors remain selective and capital allocation more disciplined, leading fundamentally strong companies to drive the initial wave while others adopt a wait-and-watch approach,” said Ratiraj Tibrewal, CEO of Choice Capital Advisors.
Tibrewal expects 2026 to witness a steady reopening of the primary market, supported by improving macro stability and a backlog of prepared issuers. |
