Primary markets lag despite Nifty50's April rebound; what's holding IPOs?

April has seen the completion of just one initial public offering (IPO), Om Power Transmission, which raised ₹150 crore.

Kumar Gaurav New Delhi

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Despite a modest rebound in benchmark indices, primary market activity has remained subdued so far in April, reflecting cautious issuer and investor sentiment amid persistent global uncertainties. So far in April, which also marks the first month of FY27, the BSE Sensex has gained 4,939.36 points, or 6.87 per cent, to about 76,886 levels. The NSE Nifty50 has risen 1,664.30 points, or 7.46 per cent, indicating a steady recovery from the impact of the ongoing West Asia crisis. However, this resilience has not yet translated into momentum in the primary market.

IPO activity slows sharply

Despite the rebound in equities, April has seen the completion of just one initial public offering (IPO), Om Power Transmission, which raised ₹150 crore. The month is shaping up to be the weakest for IPO activity since March 2025, when no offerings reached the equity primary market.

Another offering, OnEMI Technology Solutions, is scheduled to open tentatively on April 30, with a proposed issue size of ₹925.92 crore.

Market analysts attribute the slowdown in IPO activity to a mix of global uncertainty, elevated valuations, and increasingly selective investor appetite. Ongoing geopolitical tensions in West Asia, along with volatility in crude oil prices, have prompted issuers to adopt a wait-and-watch approach, particularly for larger offerings.

“By and large, we are witnessing some bounce-back in the headline indices. However, global geopolitical uncertainty still prevails in the market. While the Nifty has rebounded from recent levels, it has not been able to sustain above the 24,600 mark and continues to struggle around that range. That said, it has managed to hold near the 24,000 level,” said Kranti Bathini, equity strategist, WealthMills Securities. Notably, the Nifty50 had scaled its April 2026 high of 24,601, reflecting a gain of 2,269.60 points, or 10.16 per cent, from its March close, but has failed to hold those levels.

The analyst further added that risks in primary markets remain elevated, given that a majority of offerings have disappointed investors on listing.

“Over the past year, a majority of IPOs have disappointed investors over the longer term, with many trading below their listing prices on a one-year basis. As a result, appetite for IPOs has declined significantly in recent months amid global volatility. This is also why several companies have postponed their IPO launches, including firms like PhonePe,” said Bathini.

That said, analysts suggest that until there is a decisive recovery in secondary markets, IPO activity is likely to remain subdued. They caution that until the headline indices enter a decisively bullish phase, say above the 25,000 to 26,000 range, activity in the primary market is likely to remain subdued.

Outlook remains cautious

While sentiment in the primary market has been dented by ongoing geopolitical uncertainty, G Chokkalingam, founder of Equinomics Research, said the recent correction due to the West Asia crisis has made valuations of small- and mid-cap stocks attractive, prompting investors to move towards broader markets.

“Historically, IPO booms have typically followed post-asset bubble periods. The primary market has often trailed a surge in secondary markets, particularly in small- and mid-cap stocks, which constitute 70 to 90 per cent of IPOs. Retail investors tend to book profits in the secondary market and are then drawn to primary offerings. Hence, a strong secondary market usually triggers a primary market boom,” said Bathini.

He added that primary market activity often drains liquidity, leading to corrections in secondary market stocks. When these stocks fall sharply, valuations for primary issues are also affected, creating gaps like the current one, where many IPOs are listing at discounts.

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(Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.)

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First Published: Apr 29 2026 | 7:59 AM IST