“When you see such frenzy, there is always likelihood of some of the companies mispricing their IPOs and therefore their stocks not doing well,” Kumar told Bloomberg Television’s Haslinda Amin. “As long as majority do well, the market will support,” he said. Investors should tread with “caution” and track the institutional participants coming in as anchor investors, and fundamentals of companies, Kumar said.
Concerns around stretched valuations have intensified in recent weeks, most notably with Lenskart Solutions Ltd, the eyewear retailer founded by “Shark Tank India” judge Peyush Bansal. The company priced at several hundred times earnings and faced a wave of social media criticism over its lofty valuation — prompting a local mutual fund to issue a rare public defence of its stake. The stock whipsawed on its debut, sliding as much as 12% before clawing back losses to end slightly higher.
About half of the 333 Indian firms that made their debut this year are trading below their offer price, according to data compiled by Bloomberg, highlighting the uneven deal quality in an increasingly crowded market. Larger offerings have fared slightly better.
Kumar said global funds are likely to return to Indian markets next year if the US economy slows, while domestic retail and institutional investors are expected to continue deploying capital in 2026. Corporate balance sheets in India remain healthy, while leverage is low, he added, factors that should support fundraising activity.
See also: Syngenta hiring banks for potential Hong Kong IPO, Bloomberg reports
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