The bearish sentiments in the capital market have taken a toll not only on mainboard initial public offerings but also on the SME exchanges with about 69 per cent of issuances trading below their IPO price.
Of the total 32 SME IPO issuances in 2026 so far, 22 are trading at 3-72 per cent discounts to their issue price, while the remaining have managed to close above their issue price as of Monday.
On Monday, two companies listed on BSE SME Exchange and one on NSE Emerge. Of them, Mobilise App Lab (NSE Emerge) and Kiassa Retail (BSE SME) were down 16 per cent and 8 per cent below their issue price, while Accord Transformers closed 14 per cent above issue price on BSE SME.
Similarly on the mainboard, one in two IPOs listed are trading below the IPO price with only 10 companies venturing out to tap the capital markets so far this year.
Though the pipeline of companies waiting to hit the mainboard market remains strong, the current fluid situation in the secondary market due to ongoing war between Israel and Iran may delay some of the issuances.
Thomas Stephen, Director & Head – Preferred at Anand Rathi Shares and Stock Brokers said it has been a rather tepid response for IPOs issuances this year with only 32 companies listed compared to over 50 in 2025 in the same period.
Moreover, a good chunk of these recent IPOs were of large companies, which themselves are trading at issue price or lower due to heightened market volatility.
Large IPOs are no longer being considered a “safe bet” by investors, who are now more aware of valuations and quality of the company, he said.
While investors appetite for IPOs still remains strong in terms of wealth generation, they will be more selective and will run better due diligence before investing their hard earned money, said Stephen.
Dr Ravi Singh, Chief Research Officer, Master Capital Services said many large IPOs are trading below their issue price mainly because they were priced very aggressively at the time of listing, but once the stock starts trading in the secondary market, investors shift their focus from “story and hype” to actual earnings performance and cash flows.
When the recently listed companies start trading below their issue price, it reduces retail and institutional investors confidence which make them more cautious and hesitant to subscribe to future IPOs, he added.
“Companies planning to launch an IPO need to keep more realistic valuations that aligned with current market conditions and register steady earnings growth besides strong financial performance and transparent disclosures to build and gain investor trust,” said Singh.