Market volatility dampens IPO demand; retail, NII participation drops

India’s primary market is beginning to show signs of fatigue after a strong run in 2025, with the recent IPOs of Aye Finance and Clean Max Enviro Energy Solutions failing to fully subscribe, reflecting growing investor caution amid secondary market volatility.

So far in 2026, 10 mainboard IPOs have launched their IPOs, looking to collectively raise ₹12,947 crore. Out of this, five IPOs, including Fractal Analytics Ltd. (₹2,833.90 crore), Shadowfax Technologies Ltd. (₹1,907.27 crore), Amagi Media Labs Ltd. (₹1,788.62 crore) and Bharat Coking Coal Ltd. (₹1,071.11 crore), got listed on the BSE and NSE.

However, subscription data from the latest offerings suggests that IPOs are finding it difficult to allure investors. Barring Bharat Coking Coal (BCCL) and Amagi Media Labs, most IPOs this year have witnessed a relatively muted response, signalling a shift in investor appetite in the primary market.

State-owned BCCL’s issue saw extraordinary demand, with subscription multiples of 310.81 times from QIBs, 240.49 times from NIIs and 49.37 times from retail investors, translating into an overall subscription of 143.85 times. Similarly, Amagi Media Labs attracted strong participation across categories, with QIB subscription at 33.13 times, NII at 38.26 times and retail at 9.54 times, taking the total to 30.24 times.

In contrast, Shadowfax Technologies, Fractal Analytics and Gaudium IVF & Women Health managed to sail through in the final day of bidding.

However, Aye Finance and Clean Max Enviro Energy Solutions barely scraped through, with overall subscription hovering around the one-time mark.

MSME-focused lender Aye Finance’s ₹1,010-crore IPO was subscribed just 0.97 times overall. While qualified institutional buyers (QIBs) subscribed 1.62 times (excluding anchor investors), retail participation stood at 0.81 times and the non-institutional investor (NII) category saw an extremely weak 0.05 times subscription. The issue received 43,797 applications in total.

Meanwhile, renewable player Clean Max Enviro Energy Solutions’ ₹3,100-crore IPO also fared weaker on aggregate, subscribing just 0.99 times. Although QIBs bid 2.99 times their quota, retail participation was only 0.07 times, while NIIs subscribed 0.57 times. The issue attracted 37,210 applications.

Market experts attribute the tepid demand to volatility in the secondary market. The equity benchmarks — the BSE Sensex and the Nifty 50 — have corrected 3.6% and 2.7%, respectively, so far in calendar year 2026, amid persistent uncertainty surrounding the India–US trade deal and a sharp correction in IT stocks on concerns over artificial intelligence-led disruption.

“Primary market always takes cues from the secondary market. The ongoing volatility in the secondary market is one of the key reasons behind tepid demand being seen in some recent IPOs,” said Pranav Haldea, Managing Director of Prime Database Group.

Investor behaviour also appears to be shifting. “For IPO investors, return is the single most important metric. HNIs are getting wary of diminishing allotments and returns in IPOs. Retail investors have largely been chasing grey market-based listing gains. Since listing returns have been muted so far this financial year, investors are being extra cautious,” said Anil Sharma, Co-founder of IPOCentral.