Nifty Enters Correction as IPOs Surge Amid Foreign Selling
Despite significant foreign investor sell-offs, India's IPO market remains robust with numerous companies preparing to launch offerings.
Nifty 50 index fell 13.62% in 2026, entering correction territory.
Foreign portfolio investors sold shares worth Rs 64,742 crore in September and early October.
96 IPOs have raised over Rs 1.1 lakh crore in 2026, with major launches planned for October.
The Nifty 50 index closed at 22,555.75 on October 5, 2026, marking a notable decline of 13.62% from its peak, thus entering what is termed correction territory. This decline has been influenced by a significant sell-off by foreign portfolio investors (FPIs), who have been exiting the Indian market in large numbers. According to reports, FPIs sold Indian shares worth Rs 45,537 crore in September and an additional Rs 19,205 crore in the first five days of October, following a brief period of net buying in August.
In contrast to the foreign selling, domestic investors have stepped in to provide some stability. On October 5, while FPIs sold shares worth Rs 4,699 crore, domestic institutional investors, including mutual funds and insurance companies, were net buyers of Rs 5,182 crore, highlighting a divergence in market behavior between foreign and domestic players.
Despite the downturn in the secondary market, the primary market is witnessing a surge in initial public offerings (IPOs). So far in 2026, 96 IPOs have collectively raised over Rs 1.1 lakh crore, with 35 of these occurring in September alone. The trend is expected to continue, as twelve additional companies are preparing to launch their IPOs in October. Notably, Jio Platforms is set to launch India's largest IPO, aiming to raise Rs 30,188 crore, with subscriptions opening from October 21 to 23.
Market analysts suggest that the ongoing IPO activity can be attributed to sustained domestic investor interest, even as the broader market experiences volatility. Neha Agarwal from JM Financial noted that domestic capital continues to support IPO fundraising, although investors are becoming increasingly discerning, focusing on company valuations and earnings. This cautious approach may influence which companies attract significant investment.
Looking ahead, the coming weeks will be crucial for assessing the resilience of the IPO market amid foreign selling pressures. With major IPOs scheduled for October, the response from domestic investors will be pivotal in determining the future trajectory of both the primary and secondary markets in India.
