Just as we were about to finalise this edition of Inc42 Markets, word broke out about a ceasefire and potential peace talks in the future between India and Pakistan after two weeks of high tension and nervousness among citizens of both countries. This has naturally sent the Indian stock markets and new-age tech stocks into a bit of a lull and potentially bearish situation.

To be clear: tensions are still high and there were reports of more explosions in Srinagar later in the evening even after a ceasefire was officially confirmed.

Obviously, from a business point of view, there’s no time like peace and stability for growth. But this past week has all been about drones, rumours, speculation and fear — so naturally, even the markets did react accordingly.

War is not great for business and the economy and has a decades-long impact, and it’s safe to say that everyone is now breathing a sigh of relief after the ceasefire, even as many acknowledge that we were pretty close to something quite bad. And the end is certainly not near.

Questions From The Public Markets

If you have invested in the public markets, it’s natural to have questions about what this means for your portfolio. For founders and business owners looking to take their companies to the IPO milestone, this is yet another complication — no doubt, many boardrooms have spent the past two weeks debating whether to delay potential steps towards an IPO.

“Retail investors are the most vulnerable class, and these kinds of events disrupt their sentiment. Plus, war is detrimental to any economy. If we look at it from a historical point of view, India has previously done well post such events and the market recovered, but that doesn’t mean investors will be carefree,” says Bhavya Shah, head of research, at Wallfort PMS.

Shah added that some IPOs might also get impacted a bit as they draw fresh money and investors will be careful, but good companies will sail through this. For example, the Ather Energy IPO struggled to get subscriptions, but the IPO sailed through eventually.

Brokerage Jefferies said equity supply by way of IPOs can be calibrated well, but in 2024, nearly 75% of the supply was in the form of QIPs, PE block deals and promoter-led block deals which can spring up on short notice. A potential escalation in the India-Pakistan border tensions may weigh on market returns further and have a cascading effect on future equity supply.

This year has already seen a drop in the monthly........

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