Context:
Just 14 companies filed Draft Red Herring Prospectus (DRHP) forms in February as opposed to 29 in January, the lowest ever to show since November 2024.
Decline in Fundraising: The overall amount being sought for IPOs dipped to ₹9,695 crore, which is a low of 9 months.
What is Slow IPO Market?
The condition called the Slow IPO Market is attributed to the low DRHP applications, which observed a new low of 3 months.
What is Initial Public Offerings?
What is Behind the Slowdown?
- Market Volatility
- Since the beginning of October, companies have been extra cautious because of fluctuations in the market.
- Political Uncertainty
- The apprehension of investors has heightened since the likely return of Donald Trump to the White House in January.
- Wait and Watch mode
- IPO filings have been stopped by companies, in the hope that more stability and bullishness would follow.
Wider Market Effect
- Brokerage Stocks Suffered
- An onslaught of selling for a long period combined with possible SEBI changes in regulations related to the derivatives markets meant declines of up to 18% in a couple of brokerage stocks.
- RIL Weakens
- Stock of reliance industries (RIL) fell tracking weak earnings.
Source: BS
