Iran War Sends Shockwaves to World's Busiest IPO Market

Global volatility is threatening a series of billion-dollar listings expected to launch on the Indian Stock Exchange, the world's busiest IPO market, according to CNBC.

Payments app PhonePe's decision on March 16 to halt its listing plans highlighted growing tensions in the country as investor appetite weakens due to the fallout from the Middle East conflict.

India's benchmark indices have fallen more than 12% since January, with most of the decline in recent weeks, as the Iran war has created shocks in the energy and trade sectors that risk slowing growth and hurting corporate earnings, CNBC notes.

Meanwhile, the rupee's decline against the dollar is weighing on the economic sentiment, with foreign institutional investors selling more than $8 billion worth of shares this month, according to data from securities depository NSDL.

This risk-averse environment has drained liquidity from the primary market and reduced the chances of IPOs fetching the premium valuations that have made listing on the Indian stock exchange attractive, experts say.

Several Indian technology and consumer startups - including Walmart-backed PhonePe; fast-commerce app Zepto; e-retailer Flipkart and hotel chain Oyo - have postponed their plans due to valuation discrepancies, according to Samir Bahl, CEO of investment banking at Anand Rathi Advisors.

Zepto filed a private listing application in December and planned to raise more than $1.2 billion. Softbank-backed hospitality startup Oyo did the same in December, according to Reuters.

Oyo and Walmart-owned Flipkart did not respond to CNBC's requests for comment on the status of their listings. Zepto said it "remains in line with the previous approval, subject to market regulations.” Since the company filed its IPO application confidentially, it is not clear what the previous approval was, but a company spokesman said it plans to launch an IPO around June.

A PhonePe spokesperson reiterated the company's position that it had temporarily paused its preparations for a listing due to "current geopolitical conflicts and market volatility.”

Planned high-priced IPOs, including those of National Stock Exchange, Reliance Jio and SBI Mutual Fund, are expected to happen "once conditions improve,” Bahl said, adding that "timing and pricing will require careful calibration.”

India's largest telecom company, Reliance Jio, is planning to list for the first half of 2026 and is in the process of appointing bankers, according to Reuters. The National Stock Exchange, India's largest stock exchange, has appointed 20 commercial bankers, according to a recent announcement.

"Indian IPOs and other fundraising activities have evolved according to the level of the market; IPO activity has slowed since the start of the Iran war as investors have lost interest,” Mahesh Nandurkar, head of research and India strategist at Jefferies, was quoted by CNBC as saying last week.