Smaller IPOs Slow, Valuations Trimmed; Foreign Banks Gain Ground

• Indian IPO markets have shifted from euphoric to subdued, with valuations down 25-30% from 2024 peaks.
• Foreign institutional investors (FIIs) and retail money have retreated, making fundraising bleak.
• Domestic mutual funds are sustaining through SIP flows, but FII and retail return is needed to drive fresh IPO demand.
• Companies are still listing at lower valuations as private markets offer even less, and debt is not an option for asset-light models.
• The nature of IPOs has changed, with smaller deals vanishing and larger deals going to foreign banks like Morgan Stanley and JP Morgan.