Indian IPO trading bankers are experiencing a standstill amid Trump's rate chaos. What is the way forward? | Einsmark news

The initial public offer market (IPO) has struggled not only in India, but also worldwide due to the unrest caused by Trump’s rates. This has been over a month since any new IPOs have emerged in the Indian market, although there are numerous reports at the Securities and Exchange Board of India (Sebi). According to the IPO insights of Uniqus Consultch, Sebi has currently received about 144 draft presentation documents, which together are a planned expense size of over £ 1.47 lakh crores (about $ 17 billion). Prashanth Taps, research analyst, senior vice president of research at Mehta Equities, said that the volatility of the market and the global uncertainty due to Trump tariffs is causing pressure on primary market activities. Tepid secondary market performance from the past 3-4 months has eradicated many investors’ money and eventually reduced the epo appetite. Now, Indian promoters as well as traders are facing many obstacles to tap primary markets in which promoters are waiting and look at the mood for market recovery as investors become more cautious and sellers rethink valuations. Promoters as well as commercial bankers will watch the secondary market very closely before testing the waters. As reported by Bloomberg, on the World Front, merchant bankers judge when US IPOs could possibly return to the setback caused by President Donald Trump’s rates, which led to delays in transactions. As for the US IPO markets, Keith Canton, head of Americas Equity Capital Markets at JPMorgan Chase & Co., mentioned in a Bloomberg report that there is a ‘feeling of paralysis’ among both businesses and investors in the US. The ongoing processes are currently in the short term; Our advice to issuers is to stay prepared and we will reconsider the situation weekly and daily, but we have to wait until stability returns first. Mohit Gulati, the CIO and managing partner of the ITI Growth Opportunity Fund, shared that the Trump tariffs undoubtedly caused significant disruptions in the global financial markets, also in India, the US and other international economies. The volatility stems from increased uncertainty, trade tensions and fear of a global recession, with stock markets worldwide experiencing historical losses. However, despite this turbulence, the global economy has too much at stagnant to remain stagnant. The Indian IPO market so far in 2025 according to the Uniqus Consultch Report, the IPO market in India saw diverse trends in the first quarter of 2025, with all IPOs in January entering the market at a premium, resulting in an average profit of 30% for investors. In contrast, February has seen a significant change, where three of the four companies are listed at a lower price than their issue price. Hexaware Technologies, who made its return to the capital market, was the only firm that during this month managed to list on a premium. Despite the fluctuations, the average listing gain for the quarter remained positive at 17.53%. What opportunities exist for commercial bankers? Gulati, explained that this challenging period provides a unique opportunity for participants in financial markets to recalibrate their strategies. By focusing on understanding macroeconomic tendencies and aligning it with fundamental at micro-level, investors and trader bankers can prepare for opportunities that will be praised when stability returns. The long -term structural growth stories of resilient economies such as India remain intact, making it a time for strategic preparation rather than panic. What is the way forward? Taps explained that we can see similar flat activities in the primary markets within the near term of 2-3 months. Let Q1FY26 earnings present the show, and if there is some kind of stability in the topline as well as the most important point, which will give some confidence and visibility for the markets to perform. Big IPOs such as Ather, NSDL, JSW Cement and LG are eager to raise money from the Indian markets. Arun Kejriwal, the founder of Kejriwal Research and Investment Services, also added that conditions could improve in the coming month, and as soon as the situation stabilized, the normality is expected to return, possibly at 10% levels or 15% down; The exact level remains uncertain. A return to normal does not imply a static or uncertain environment; When conditions improve, merchant bankers are likely to adopt more rational pricing strategies, which will lead to new issues being launched and sold. A month and a half have passed without any new problems, and with each day it becomes clear that two or three issues emerge, although they do not attract a significant investor interest. The primary market cannot recover without an excellent IPO, and an excellent IPO is understood to be fairly valued at 10-20% less than investors are willing to accept. So who will take the initiative to drive it forward? Disclaimer: The views and recommendations above are those of individual analysts, experts and brokerage companies, not of currency. We advise investors to check with certified experts before making any investment decision. First published: 11 Apr 2025, 02:17 IST