War weighs on IPO-led investor exits

MUMBAI: A prolonged West Asia war is slowing down the pace of IPOs, delaying exits for investors as companies rethink timelines to launch public issues amid a volatile market. In 2025, IPOs drove nearly 40% of public market exits for venture capital (VC) and private equity (PE) growth investors (covers select PE investments), helped by a higher number of listings worth more than $100 million, a joint report by Bain & Company and The Indian Venture and Alternate Capital Association (IVCA) said.

In all, public markets led about 67% of total exits worth $7 billion last year while non-IPO public market exits declined by about 22% in value as investors prioritised liquidity events with better price discovery. “There will be a slowdown in the pace of exits. Hold periods will start to get a bit longer as there will be a mismatch (in terms of market pricing and valuations) between what buyers and sellers are expecting,” Prabhav Kashyap, partner at Bain & Company told TOI.

Walmart’s PhonePe that was all set for a $1.3 billion IPO sometime in April has postponed its listing as war-jittered investors, it is understood, seemed reluctant to ascribe it a valuation of $15 billion the firm had been targeting.

Earlier in the week, XED Executive Development, India’s first gift city IPO withdrew the issue due to weak markets. “Timing of exit through IPOs will be revisited,” Kashyap said. With markets taking a beating since the war, India’s IPO market has taken a hit after a stellar run last year. Sensex and Nifty ended FY26, down 5.4% and 3.6% respectively.

After a lacklustre 2025 that saw overall VC-PE funding drop by 18% year-on-year, the war has cast a cloud over deal making this year too as investors turn cautious with capital deployment despite sitting on a substantial pool of funds.

Fundraising by investors touched nearly $5.4 billion in 2025, roughly double of that of 2024 levels, mainly driven by a surge in funds worth over $100 million and a 35% increase in average fund size.

“There is always some slowdown that happens with respect to deal making during any volatility,” Kashyap said, adding that there could be some amount of distress deals and down rounds. “Investors are currently prioritising risk assessment for portfolio companies (impacted by war) and figuring out action plans,” Kashyap said.
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