India's IPO market loses steam on uncertain outlook; Ather stumbles
Education loan provider Avanse Financial Services and contract drug maker Anthem Biosciences are among companies that will join notable names such as South Korean conglomerate LG Electronics' India unit, to put IPO plans on hold for now, the bankers said.
'There are only select institutional investors coming in at this point given the global uncertainty,' Suraj Krishnaswamy, the managing director of investment banking at Axis Capital, said. 'And India-Pakistan tensions have not helped.'
The trend is an indication that the global trade war and geopolitical tensions have clouded the economic outlook and caused companies to delay their capital raising and investment plans.
The debut of electric scooter maker Ather Energy, seen as a barometer of investor appetite for the primary market, did not alleviate the market's concerns. The stock closed 5.8% lower, reversing gains after listing at a premium of 2% to its issue price of 321 rupees.
The muted listing for a high-profile EV name, which broke a two-month lull in mainboard IPOs, highlights the broader weakness in India's primary market and caution surrounding intense competition in the EV space and elusive profitability, said Vinit Bolinjkar, head of research at Ventura Securities.
As many as 58 companies with Indian regulatory clearance have not launched their IPOs due to global market disruptions caused by U.S. President Donald Trump's tariffs, which have negatively affected business sentiment and fuelled recession fears.
Indian e-scooter maker Ather Energy falls in market debut
Avanse Financial Services received approval for its $356 million IPO in October 2024, while Anthem Biosciences was cleared to raise $403 million on April 3. Neither company responded to Reuters' requests for comment.
The regulatory clearances of some firms will expire over the next few months, PRIME Database Group MD Pranav Haldea said, forcing them to either restart the entire IPO process or seek an extension from India's market regulator.
India, which was the world's second-largest IPO market last year, has seen a 58% slump in IPOs listed on the main stock exchanges so far this year, according to PRIME Database. The total fundraising on all the listing platforms has seen an 18% drop, LSEG data showed.
'Things are moving slowly, but it is not a complete standstill. In the current scenario, most of the IPOs are in a similar situation,' said an investment banker, who requested anonymity as he was not authorised to speak to the media.
Company executives agreed.
'You don't want to file (for IPO) when you do not know how long the volatility will last,' online automobile marketplace Droom's CEO Sandeep Aggarwal said, adding that his firm had decided against filing draft IPO papers by June as it had originally planned.
Worried investors
Retail investors, having suffered significant losses due to market volatility, are being more cautious with new investments, resulting in a lukewarm reception for this year's IPOs.
Ather Energy, which decided to proceed with its $352 million IPO despite the uncertainty, had to cut its target valuation by 44% and lower its offer size.
'Ather can be a risky bet given the current geopolitical issues and high valuation,' Hem Securities senior research analyst Astha Jain said.
India's Nifty 50 is up 4.8% from April 2, since U.S. President Donald Trump announced 'reciprocal' tariffs, but is still down 7% from record highs hit in late-September.
The unpredictable environment is prompting bankers to urge their prospective IPO clients to adjust their strategies.
'If the issue is important, then you may have to reconsider valuations. If valuation is important, then you have to wait for some more time,' said Bhavesh Shah, the managing director and head of investment banking at Equirus.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
37 minutes ago
- Business Recorder
IWT: India steps up its jingoistic rhetoric
NEW DELHI: Prime Minister Narendra Modi said Friday that India is seeking self-reliance in energy independence and the development of its own powerful defence systems, vowing to defend his country's interests 'like a wall'. Modi delivered his annual Independence Day address from the imposing ramparts of New Delhi's Red Fort at a time when India faces intense pressure and threats of additional tariffs from the United States. 'Self-reliance is the foundation of developed India,' Modi said after a flypast of military helicopters scattered flower petals above an invited crowd of thousands. 'Freedom becomes meaningless if someone becomes too dependent on others'. Ties between New Delhi and Washington have been strained by Trump's ultimatum that India end its purchases of Russian oil, a key source of revenue for Moscow as it wages its military offensive in Ukraine. Modi also honoured the Indian armed forces, which took part in a four-day conflict with arch-rival Pakistan that ended in a ceasefire on May 10. 'India will give a befitting reply to any other misadventure by the enemy,' he added, and referred to New Delhi's suspension of its cross-border water sharing treaty with Pakistan. 'India has decided that blood and water will not flow together,' he added. India has said it 'stands ready' to support efforts to end the Ukraine war and endorses a summit to be held between Trump and Russian President Vladimir Putin in Alaska on Friday. But the United States says it will double new import tariffs on India from 25 percent to 50 percent by August 27 if New Delhi does not switch crude suppliers. 'We know that we remain dependent on many countries to meet our energy needs', said Modi, leader of the world's most populous nation and fifth-biggest economy. 'But to build a truly self-reliant India, we must achieve energy independence.' US Secretary of State Marco Rubio, in a statement congratulating India's Independence Day, said the relations between the two nations were 'consequential and far-reaching', and wanted to 'ensure a brighter future for both'. Modi urged scientists and engineers to focus on building key sectors and technologies including fighter jet engines, semiconductor chips and military hardware systems. 'We will have India-made semiconductor chips in the market by the year's end,' Modi said. He added that the country was also working towards building a space station and would have a 'defence shield' in the next decade, without giving further details.
Business Recorder
37 minutes ago
- Business Recorder
Independence Day brings message of economic growth: UBG
KARACHI: The country's economic indicators are moving in a positive direction, and improving trade relations with the United States and China have raised hopes of economic recovery and development among the industrial and business community for the coming years. If the government addresses the concerns of the business sector, Pakistan's economy could soon become strong and stable. Field Marshal Syed Asim Munir and Prime Minister Mian Shahbaz Sharif, along with their team, are making dedicated efforts toward this goal. Pakistan's 78th Independence Day has brought a message of economic growth and prosperity. According to UBG's central spokesperson Gulzar Feroz, these views were expressed by United Business Group (UBG) President and former FPCCI President Zubair F. Tufail during a conversation with representatives of the business community on Independence Day. Zubair Tufail said that the government must promote locally manufactured products and services both in domestic and international markets. It should prioritize reducing local industrial production costs and facilitating ease of doing business for local and foreign companies. This would help boost investment and significantly increase Pakistan's total exports. The UBG President highlighted that the recent increase in US tariffs poses a serious threat to India's $87 billion exports to the United States. These exports constitute 18% of India's total exports and more than 2% of its GDP. Indian exports in textiles, jewellery, and automobiles could decline by 40-50%, creating a major opportunity for Pakistan's industry to step in. He urged the government to sit down with stakeholders and prepare an effective plan to capitalize on this shift. Business-friendly policies would help the government generate new employment opportunities and reduce poverty. He said the business community is fully prepared to contribute toward strengthening the national economy and improving Pakistan's global image. Copyright Business Recorder, 2025
Express Tribune
6 hours ago
- Express Tribune
Pak-Afghan relations: winds of change?
Are we in for a radical change in Pak-Afghan relations after an unprecedented move by proponents of the former Northern Alliance, many of whom now embody the National Resistance Front (NRF) of Afghanistan, led by Ahmed Masood, the son of the late Ahmed Shah Masood? Or does a rude shock await the new Kabul regime through new alignments involving Tajikistan, the historical base of the Northern Alliance? But before delving into the Pak-Afghan issue, let's look at three critical developments in the current "world in flux". President Donald Trump's peace and tariffs offensives are indeed enforcing recalibration, if not major shifts, in global alliances. Trump's meeting with Russian President Vladimir Putin — regardless of immediate outcomes — marks a defining moment both for their bilateral relations and the present turbulent geopolitics. Secondly, after China's upfront posturing on the tariffs issue forced Trump into extending the deadline for trade negotiations, Indian business executives and Prime Minister Narendra Modi are slowly upping the India card with their anti-America rhetoric. This is triggering calls across India for boycotting McDonald's, Coca-Cola, Amazon and Apple, among others — all prompted by US tariffs on exports from India, which is the biggest market for Meta's WhatsApp and beverages like Pepsi, Coca-Cola or Starbucks. India, being the world's most populous country and the fourth largest economy, certainly sees value in leveraging its soft power vis-à-vis a strident Trump, not ready to bend - at least for now. Thirdly, and it relates to the messaging, Trump's policies on tariffs and conflict are radiating with a "sobering" effect on the smaller and weaker stakeholders across the globe. And one wonders if the Independence Day felicitations from the traditionally pro-India and anti-Taliban NRF, a successor to the Northern Alliance, also flow from President Trump's indirect messaging. The unprecedented NRF message (congratulations to Pakistan and its people on the occasion of the country's Independence Day) comes in the context of an argument that present Taliban government leaders often peddle in private; Northern Afghan groups would brand us as "pro-Pakistan if we shunned the historical Afghan position on the border issue." It is worth recalling that when the US launched its bombing of Kabul on October 7, 2001, in the aftermath of the 9/11 terror attacks in New York and Washington, their partner on the ground was Masood's Shoorae Nazar, then led by Marshal Faheem. Masood had been assassinated by Al-Qaeda militants disguised as journalists in his native Takhar province only two days before the 9/11 attacks. The entire politics of Shoorae Nazar was anti-Pakistan, pro-India, and they had always leveled allegations that sounded like coming from India. Most of their leaders lived in India before and after the 9/11 attacks. Even Masood Khalili, who was injured in the attack on Ahmed Shah Masood, was taken to India for treatment. It is nothing but ironic that following decades of acrimonious posturing, the successor to Shoorae Nazar — NRF — has extended an olive branch to Islamabad through an encouraging Independence Day message. Now that the late Ahmed Shah Masood's son has formally congratulated Pakistan, Taliban Foreign Minister Amir Khan Muttaqi also sent similar greetings to his Pakistani counterpart, Ishaq Dar, according to an official announcement from Muttaqi's office. The exchange of greetings also coincided with the celebration of "Victory Day" — when the Taliban regained power in Afghanistan on a Sunday, August 15, four years ago. Does the festive mood - a mix of hope and goodwill — around Pakistan's Independence Day, Afghanistan's "Victory Day", followed by the Afghan Independence Day on August 19 coupled with positive messaging from the NRF offer a chance to Afghans in general and to the Taliban regime in particular to build on their expression of goodwill for Pakistan? Can the development help Afghans embrace the reality of Pakistan as it has existed since 1947, abandon the old clichéd narratives that often belittle and accuse it of treating Afghanistan as a colony, and move on in favour of an equal-footed cordial relationship between the two uneasy neighbouring countries? Have the winds of change begun blowing to improve Pak-Afghan relations, or should the NRF felicitation gesture signal something ominous to Pakistan, particularly at a time when both China and Russia have courted the Taliban leadership, with Moscow recognising the Kabul regime to the displeasure of the Trump administration? How would Taliban leaders view the recently concluded Pakistan-Tajikistan Counter-Terrorism Exercises Dosti-ll (August 4-9) in a country that historically served as the base for Shoorae Nazar during the anti-Soviet jihad? Dushanbe, the capital, also symbolised the shelter and support (including from India) to Ahmed Shah Masood's militia in its fight against the Taliban until the 9/11 events, and continues to be the hub of NRF activities.
