India’s domestic funds are driving a harder bargain on IPO pricing, using their growing clout to rein in valuations even for the biggest deals as the broader stock market struggles. Domestic funds are reining in valuations for even the largest initial public offerings in India as they increasingly exert pricing power to push for discounts reflecting the equity market’s struggles. The median price-to-book ratio for IPOs raising at least 10 billion rupees ($104 million) dropped to 7.4 times in 2026 from 10.2 times last year, per data from fintech platform Chittorgarh.
Only two loss-making companies were in the cohort this year, down from at least five each in 2025 and 2024. Indian stocks face pressure from the Iran war, global trade tensions, and AI industry anxiety. With persistent foreign selling, local money managers are seizing control of deal terms, forcing cheaper entry points or risking scrapped sales. "A year back, companies were not budging on pricing," said Ritesh Taksali, chief investment officer at Edelweiss Life Insurance. "Now you can get some companies at a good discount." The share of domestic institutions in IPO proceeds rose to 33% this year from 24% in 2021, per primedatabase.com.
The impact hit marquee listings: the National Stock Exchange of India IPO was downsized by about 15%, Zepto Pvt. paused its August offering, and Prestige Estates Projects Ltd.’s hospitality unit delayed its sale. Fund managers still see pricing as often frothy, but investors are now more selective. "I would like, as a buyer, for more value to be left on the table," said Gaurav Misra, Mirae Asset Mutual Fund’s head of equities. "The clearest sign is at the top end," said Rajesh Singla, CEO and Fund Manager at Alpha AMC, noting NSE trimmed its offer size ahead of opening.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing