If the equity indices have been in a downtrend for three consecutive weeks, it is partly to do with funds flowing into initial public offerings (IPOs), qualified institutional placements (QIPs) and rights issues.
“Moreover, there is not exactly a deluge of foreign flows,” said a senior fund manager, pointing out that foreign portfolio investors (FPI) have been selling stocks in July.
Data from primedatabase.com reveal that money raised via IPOs has topped Rs 52,000 crore so far in 2025 (data available until July 16). Moreover, institutions have invested more than Rs 55,000 crore in QIPs, with the bulk of this going to State Bank of India’s Rs 25,000-crore offering.
In all, money mopped up via IPOs, FPOs, QIPs and rights issues has crossed Rs 1.15 lakh crore so far in the calendar year. Funds raised via IPOs at Rs 45,350 crore in the January-June period marked a hefty 45% increase over the corresponding period in 2024. Among the major IPOs launched during this period were HDB Financial Services (Rs 12,500 crore), Hexaware Technologies (Rs 8,750 crore), Schloss Bangalore (Rs 3,500 crore), and Ather Energy (Rs 2,981 crore).
Broader Markets Shine
For the week ended July 18, the Sensex and Nifty lost 0.90% and 0.72%, respectively, marking their third consecutive weekly loss. At the same time, the broader markets outperformed the benchmarks, with the BSE Midcap and BSE Smallcap gauges rising 1.05% and 1.47%, respectively. Over the past three weeks, both the Sensex and the Nifty have tumbled by nearly 3%.
Valuation Concerns
Poor quarterly earnings performances have also seen investors taking risk off the table in some index stocks. What has helped keep the markets from falling too much are strong retail and HNI (high net worth individual) inflows into mutual fund schemes and portfolio management schemes.
Experts have pointed out that valuations are not cheap given the possibility of earnings disappointments in H1FY26. “The Nifty is trading at a price earnings multiple of 22X one year forward and very few stocks are attractively priced,” said the sales head of a local brokerage. The Street estimates Q1FY26 net profits of the BSE-30 and Nifty-50 to increase 6.1% and 4.1% YoY, respectively. Domestic economic conditions are expected to improve in H2 following fewer global and domestic headwinds.