Indian Domestic Funds Force Lower IPO Valuations

Domestic investment funds in India are utilizing their increased market influence to force lower valuations for initial public offerings. The median price-to-book ratio for IPOs raising at least 10 billion rupees dropped to 7.4 times in 2026, compared to 10.2 times in 2025.

This shift follows persistent foreign selling driven by AI-related anxiety, the Iran war, and global trade tensions. Local money managers are now demanding deeper discounts and greater margins of safety, which has forced companies to either lower their prices or postpone listings entirely.

Several high-profile offerings have been affected by this trend. The National Stock Exchange of India downsized its IPO by approximately 15% to meet investor pricing demands. Additionally, rapid-commerce firm Zepto Pvt. paused its offering in August, and the hospitality unit of Prestige Estates Projects Ltd. paused its listing last week. Investment leaders from Edelweiss Life Insurance and Mirae Asset Mutual Fund noted that buyers now prefer more value to be left on the table, while Alpha AMC identified the downsizing of the National Stock Exchange offer as evidence that sellers are responding to investor pressure.