Synopsis
Public listing plans for new-age fintech companies have received a major blow as the crisis in West Asia has battered the Indian rupee and stock valuations in Mumbai, prompting the highest ever annual withdrawal by overseas funds from locally listed equities.Additionally, with a drastic reduction in retail investors’ participation in the IPO market, industry insiders believe it is better to wait for the conflict in Iran to end and the rupee – Asia’s worst performer in FY26 – to regain some stability.
“The companies who have strong investors are going easy as their backers do not want to act in a rush and they want to wait out for stronger macroeconomic headwinds,” said a founder of a startup which is in the IPO process. He spoke on the condition of anonymity.
Another founder of a fintech firm which had plans to go public and had started the process as well pointed out that retail investors are sitting on major losses in their investments and even mutual fund portfolios are down.
“This is not the right time to rush into an IPO, so we are keeping the internal processes ready and hoping that over the next one to two quarters things will get back on track,” he said.
Overseas funds withdrew Rs 1.6 lakh crore from Indian equities in FY26 - the highest ever for a financial year - even as the rupee slumped nearly 10% against the US dollar to rank as Asia's worst performer in its steepest decline in 14 years.
With Walmart-backed PhonePe delaying its billion dollar IPO plans earlier this month on concerns around valuation and the West Asia crisis, the other startup founders have also gone cautious.
“There is too much uncertainty right now, we are well funded, already profitable and we are in no rush,” said a top executive at one of the firms which is currently preparing to file its draft documents.
One of the founders quoted above said that the decision purely rests on whether the valuation that mutual funds and other large domestic investors are ascribing to the company is up to the level of comfort for the investors and the founders.
