Triggered by the ongoing Middle East crisis, the Indian equity market has corrected nearly 10% since the onset of the U.S.-Israel-Iran conflict on February 27, erasing an estimated ₹37 lakh crore of investor wealth amid heightened volatility and a clear risk-off sentiment.

The impact has been particularly visible in new-age and recently listed companies. A basket of prominent tech-driven firms - including One 97 Communications (Paytm), PB Fintech, FSN E-Commerce Ventures, operator of the Nykaa brand, and Swiggy - collectively saw over ₹49,000 crore wiped out in market capitalisation between February 27 and March 23, 2026.

Among the biggest losers, Eternal, parent company of Zomato, led the decline with a ₹9,072 crore erosion in market value, followed by FSN E-Commerce Ventures and Meesho, which lost ₹8,847 crore and ₹8,102 crore, respectively. Travel-tech firm TBO Tek Ltd and fintech player Pine Labs Ltd also saw sharp corrections, with double-digit declines in stock prices.

The weakness extended across sectors, with gaming firm Nazara Technologies Ltd emerging as the worst performer in percentage terms, while insurance and mobility players such as Go Digit General Insurance Ltd and Ola Electric Mobility Ltd reported relatively contained losses.

IPO index under pressure

Reflecting the broader stress, the BSE IPO Index has witnessed sharp swings in 2026. The index has declined over 4% in the past month amid volatility triggered by the West Asia crisis and is down more than 8% year-to-date.

This follows a cooling-off phase after a stellar run in previous years. The index had surged 41% in 2023 and 31% in 2024, before declining over 4% in 2025. Strong listing gains and liquidity-driven rallies had powered those returns, a trend that now appears to be reversing.

The current correction reflects a mix of volatile market conditions, uneven fundamentals among newly listed firms, and muted listing gains, factors that have collectively dampened investor appetite for IPOs.

2026 IPOs struggle to hold gains

The primary market is also showing signs of fatigue. Of the 14 mainboard IPOs listed so far in 2026, as many as 10 are trading below their issue price, highlighting cautious investor participation and increasingly selective buying.

While a few companies have bucked the trend, the broader picture remains weak. SEDEMAC Mechatronics has emerged as the top performer with strong gains over its issue price, followed by Bharat Coking Coal Limited, which has delivered steady returns despite volatility. GSP Crop Science has posted modest gains.

On the other hand, stocks such as Clean Max Enviro Energy Solutions and Innovision have seen steep corrections, while Shree Ram Twistex ranks among the worst performers. Aye Finance and Shadowfax Technologies are also trading below their issue prices, underscoring the lack of sustained post-listing momentum.

Market participants say the sharp correction underscores the vulnerability of high-growth, new-age companies to global macro shocks. With foreign investors turning cautious and liquidity tightening, these stocks, often trading at premium valuations, are more exposed to risk-off episodes.

Ratiraj Tibrewal, CEO at Choice Capital, said investor sentiment has been impacted by foreign fund outflows, currency weakness, and broader market corrections, all of which are directly influencing IPO timing and pricing decisions. Foreign institutional investors (FIIs) play a critical role in providing liquidity and setting the tone for large issuances, so their outflows signal caution and reduce demand.

At the same time, currency weakness and volatile market conditions further dampen investor willingness to participate, he added.

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