₹18,000-crore IPO pipeline at risk as approvals near expiry

The impending expiry of these clearances, given by the Securities and Exchange Board of India (Sebi) between April and June 2025, underscores how volatile market conditions are prompting firms to defer listings, raising the prospect of higher costs, delayed timelines and a near-term squeeze on fresh market liquidity.

Per PRIME Database, these include the Munjal family's ₹3,600-crore Hero Fincorp Ltd offer, Morgan Stanley-backed Continuum Green Energy Ltd's ₹3,650 crore plan, and Norwest Venture Partners-backed Veritas Finance Ltd's proposed IPO worth ₹2,800 crore.

Following Sebi approval, companies typically file a red herring prospectus with the Registrar of Companies within four to six weeks.

Sebi regulations mandate that companies must launch their IPOs within 12 months of receiving the final observation letter. Failure to execute the share sale within this timeframe requires companies to file a new draft red herring prospectus (DRHP), undergo the review process again, and submit updated financial records.

Companies let IPO approvals lapse primarily to avoid poor valuations and low investor demand caused by volatile or bearish market conditions. Since an IPO is a once-in-a-lifetime fundraising event, firms prefer to wait for a better market window rather than list at a lower-than-desired price.

While the above-mentioned companies have not launched their offers over the last year, the next few months might also not be ideal for them, as market sentiment for IPOs faces a tough test.

"Allowing Sebi’s observation letter to lapse is effectively a restart of the IPO process. From a cost perspective, issuers must again incur legal, merchant banking, auditing and diligence expenses, which can cumulatively run into several crores, depending on the size of the issue," explained Archana Balasubramanian, a partner at legal firm Agama Law Associates.

Most of these offers were filed in 2025, when an IPO frenzy made it a record year for the primary market. There were 103 mainboard companies that raised over ₹1.75 lakh crore through IPOs, surpassing the previous record set in 2024.

While 13 major companies are close to their 12-month IPO deadlines, six others—PMEA Solar Tech Ltd, Varindera Constructions Ltd, SMPP Ltd, Kumar Arch Tech Ltd, CIEL HR Services Ltd, and Paramesu Biotech Ltd—saw their Sebi approvals lapse since the start of the calendar in January, leaving approximately ₹7,600 crore in planned capital in limbo.

For context, in 2024, only four mainboard IPOs of a total ₹6,700 crore saw their Sebi approvals lapse without formally withdrawing their listing plans. This included Tata group's Tata Play that had originally filed for a ₹2,500 crore offer via the confidential route and Bank of Baroda-backed IndiaFirst Life Insurance's offer of similar size.

In 2025, six IPOs worth around ₹6,300 crore saw their approvals expire, the biggest of which were TPG-backed SK Finance's ₹2,200 crore offer, Paras Healthcare's issue worth around ₹1,600 crore, and Muthoot's Belstar Microfinance with a proposed IPO worth ₹1,300 crore.

What next after deadline lapse

Coming back to this year's lapsing issues, if these companies wish to tap the primary market again, they will have to refile their offer documents that will require updated financial statements and refreshed disclosures. "This may impact valuation benchmarks and investor perception," Balasubramanian said.

Beyond the market timing, the operational tax of a lapsed filing is massive, an investment banker at a domestic firm said, wishing to remain unnamed.

"We're talking about forcing management teams back into the trenches for exhaustive due diligence and fresh regulatory cycles that can easily derail a capital calendar by two quarters," this banker explained. "While we'll always ask for a tactical pause over pricing into a falling knife, letting an approval lapse is always a last option."

Mint had reported on 12 March that listing performance has already begun to show visible signs of cooling despite the strong issuance cycle.

Since January, IPOs have seen their weakest aggregate listing performance since at least 2019, with 11 major issues generating an average listing premium of just 2%. For comparison, at the peak of the IPO boom, the average listing gain across all issuances was 49% in 2024. For the 2025 cohort, this fell to 10.6%. That year, the number of mainboard equities posting listing gains was 67% of the total issuances, before declining to 36% in 2026.

"The expiry mechanism reinforces regulatory discipline but comes at a tangible cost, both in terms of time and resources, for companies navigating the public markets," Hardeep Sachdeva, a senior partner at law firm AZB & Partners, said.

Merchant bankers Mint spoke to earlier this month said IPOs of renewables firms and high-profile startups, including payment firms, private equity-backed quick-commerce firms, and hospitality brands, might get delayed by at least a month or two, as companies assess the right time for entering the market.

The shift in sentiment could slow IPO launches in the near term, potentially ending a multi-year boom, even though the pipeline of companies planning to tap the market remains large.

Most awaited planned offers for the year include those of National Stock Exchange, Reliance's Jio Platforms, India's largest asset manager, SBI Funds, and e-commerce platform Flipkart.