Domestic investors force lower IPO valuations as Indian market weakens

Domestic investors in India are increasingly dictating IPO terms, driving down valuations even for high-profile listings as the equity market endures pressure from geopolitical tensions and AI-related concerns. According to fintech platform Chittorgarh, the median price-to-book ratio for IPOs raising at least ₹1,000 crore dropped to 7.4× in 2026, down from 10.2× the previous year. Persistent foreign selling has handed local fund managers greater leverage, forcing issuers to provide deeper discounts or scrap deals entirely.

The National Stock Exchange of India’s second-largest ever IPO was reduced by roughly 15%, while Zepto and Prestige Estates’ hospitality unit have put their offerings on hold. Market participants such as Ritesh Taksali of Edelweiss Life Insurance note a shift from earlier pricing rigidity to more cautious buying, emphasizing margin of safety.