Cautious Markets Push Companies To Rethink IPO Sizes Ahead Of Launch

At least 10 companies are reportedly weighing plans to reduce the size of their upcoming initial public offerings (IPOs) to make sure the issues sail through. The move comes against the backdrop of softer investor sentiment, where fund managers are picking and choosing where to put their money far more carefully than before.

This follows a Securities and Exchange Board of India (SEBI) decision allowing companies that already have approvals to either increase or decrease the size of their fresh issue by up to 50%, without having to file a new draft offer document.

The relaxation applies to IPOs hitting the market before September 30. Otherwise, any change beyond 20% from the original estimate would require companies to refile their draft prospectus.

Which Sectors Are Looking At Cuts

The companies considering smaller IPOs are spread across a mix of sectors, including non-banking finance companies (NBFCs), jewellery, food, packaging, healthcare, and steel. According to people familiar with the discussions, these issuers are aiming to launch over the next two to four months, provided the secondary market holds steady.

Analysts believe smaller companies, especially those planning IPOs in the ₹200–400 crore range, are more likely to use this window to adjust their offerings. The idea is simple. It is better to reduce the issue size and secure full subscription than launch a bigger issue that may struggle to attract demand.

Why It Matters For Larger Issuers

According to experts, the flexibility is particularly useful for big-ticket IPOs. Their success leans heavily on institutional buyers, whose appetite can change quickly depending on market conditions. Being able to adjust the issue size on the fly helps avoid under-subscription or having to drop the price to get the deal across the line.

Out of the 146 companies that have received SEBI's approval to collectively raise more than ₹2 lakh crore, 43 have approvals valid only until September. Within this set, 45 are looking at issues of ₹1,000 crore and above, while 27 are targeting between ₹500 crore and ₹950 crore. Another 22 are in the ₹150–500 crore range.

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Trimming Without Retreating

Analysts say this is less about backing off and more about reading the room. The popular approach being discussed is trimming the offer-for-sale (OFS) portion, where promoters cash out, while leaving the fresh issue untouched so the business still gets the funding it needs.

Experts also pointed out that ongoing uncertainty linked to the West Asia conflict and other global pressures has been weighing on IPO demand. If conditions stay choppy, more issuers are expected to recalibrate closer to launch and focus not just on size but on getting the valuation right.

Source:

Economic Times