Valuations of companies planning to get listed on the stock markets have moderated to more “disciplined” levels, following increased market volatility driven by geopolitical uncertainties.

“Investors are rewarding companies with strong fundamentals. Clear earnings visibility and reasonable valuations continue to receive strong demand, while aggressively priced initial public offerings (IPOs) are seeing a more cautious response,” said Sumeet Lath, Associate Director and Co-Head - ECM Execution at Anand Rathi Advisors Limited.

This was not the case last year when several issuers sought to maximise valuations by pricing their IPOs at the upper end of listed peer multiples, he added.

Companies that seek listing have adjusted to this reality. Many of the entities, which may have planned to list in the beginning of the calendar year, deferred their plans, as geopolitical tensions made stock markets volatile and outcomes of listing uncertain.

“This is working well for investors too. IPOs which would give a post listing market capitalisation between ₹10,000 crore to ₹40,000 crore are a good Mcap,” Bharat Lahoti, President and Co Head, Factory Investing Edelweiss Mutual Fund. These companies can move up the market capitalisation ladder, he added.

There is also a growing race against time to complete the listing, as favourable issuance windows are becoming fewer and less predictable, especially with the expiry of the listing application looming, according to Lath.

“As of June 2026, 176 companies had valid Securities and Exchange Bpard of India (SEBI) approvals, while 74 more were awaiting approval, with many aiming to tap the market during the September–October window,” he said.

An IPO is typically a 3–4 year journey, with SEBI approval being the final milestone, after which the company has a one-year window to launch.

Several companies therefore choose to proceed despite lower-than-desired valuations or reduced issue size, rather than wait for ideal market conditions and risk letting their approval lapse, said Pranav Haldea, MD of PRIME Database.

The current pricing discipline could mark the beginning of the next IPO cycle, Mr. Lahoti said.

Published - August 10, 2026 08:26 pm IST