Fintechs go easy on IPO plans as war rattles stock markets

Synopsis

Public listing plans for new-age fintech companies have received a major blow as the crisis in West Asia has battered the Indian rupee and stock valuations in Mumbai, prompting the highest ever annual withdrawal by overseas funds from locally listed equities.

Public listing plans for new-age fintech companies have received a major blow as the crisis in West Asia has battered the Indian rupee and stock valuations in Mumbai, prompting the highest ever annual withdrawal by overseas funds from locally listed equities.

Additionally, with a drastic reduction in retail investors’ participation in the IPO market, industry insiders believe it is better to wait for the conflict in Iran to end and the rupee – Asia’s worst performer in FY26 – to regain some stability.

“The companies who have strong investors are going easy as their backers do not want to act in a rush and they want to wait out for stronger macroeconomic headwinds,” said a founder of a startup which is in the IPO process. He spoke on the condition of anonymity.

Another founder of a fintech firm which had plans to go public and had started the process as well pointed out that retail investors are sitting on major losses in their investments and even mutual fund portfolios are down.

“This is not the right time to rush into an IPO, so we are keeping the internal processes ready and hoping that over the next one to two quarters things will get back on track,” he said.

Overseas funds withdrew Rs 1.6 lakh crore from Indian equities in FY26 - the highest ever for a financial year - even as the rupee slumped nearly 10% against the US dollar to rank as Asia's worst performer in its steepest decline in 14 years.

With Walmart-backed PhonePe delaying its billion dollar IPO plans earlier this month on concerns around valuation and the West Asia crisis, the other startup founders have also gone cautious.

“There is too much uncertainty right now, we are well funded, already profitable and we are in no rush,” said a top executive at one of the firms which is currently preparing to file its draft documents.

One of the founders quoted above said that the decision purely rests on whether the valuation that mutual funds and other large domestic investors are ascribing to the company is up to the level of comfort for the investors and the founders.

Also Read: PhonePe IPO delay signals valuation standoff for upcoming new-age listings

Valuation discomfort

“There will surely be a knock on the valuation if any company wants to go public in this market, it will also show desperation for fund raise and exit for existing investors,” he added.

Overall the BSE Bankex, which is a collection of 14 of the largest banks in the country, has fallen 15.4% in the last three months.

Overall the BSE Sensex has climbed down to around 72,000 currently from around 85,000 in the beginning of this year. Additionally Aye Finance, a new-age fintech lending startup which is backed by Elevation Capital, Capital G, had a very muted public listing process, which has made other fintech founders cautious. Currently the Aye Finance stock is trading at Rs 95 down 26% from around Rs 129 at which it was listed in February this year.

Turtlemint, a Peak XV Partners-backed insurance distribution startup, had filed its updated draft documents in February this year. Bengaluru-based digital lending startup Moneyview had filed its draft documents in March.

Kissht had filed its draft documents in August last year. Pune-headquartered consumer lending startup Fibe had already started conversations with merchant bankers for a planned public listing in the middle of this year, according to people in the know.

Turtlemint and Moneyview did not respond to ET's queries.

Ranvir Singh, cofounder of Kissht however denied that his company is slowing down the IPO process. Commenting on the valuation issues being faced by some companies Singh said: “Not true. There are examples of contrary (players) in the market.”

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