India’s benchmark indices extended their decline, with market participants attributing the weakness not only to elevated crude oil prices and geopolitical uncertainties but also to the massive liquidity absorption by the ongoing Jio Platforms IPO.
While global factors remain the primary overhang, market experts said the country’s largest-ever public issue has diverted a significant pool of investor capital away from the secondary market. Since the opening of the Jio Platforms IPO two days ago, benchmark equity indices have fallen nearly 1 per cent.
“A lot of money has gone out. Investors are setting aside capital for this IPO. As a result, even when opportunities emerge in the secondary market, they are unlikely to deploy fresh money there,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Drawing parallels with past blockbuster offerings, Vijayakumar cited the NSE IPO, which attracted substantial investor interest and was heavily oversubscribed but is now trading below its issue price. “These are largely sentimental effects. Investors tend to get carried away by highly subscribed public issues,” he said.
Vijayakumar also recalled the Reliance Power IPO in 2008, which saw overwhelming demand but failed to sustain its offer price after listing. While stressing that Jio Platforms should not be judged by the same benchmark, he said investors may be overlooking attractive opportunities in the secondary market amid the IPO frenzy.
Market veteran Dinesh Nagpal said the liquidity squeeze is not limited to marquee offerings. “It is not just the large IPOs that are drawing liquidity away. Even smaller issues have attracted significant investor interest over the past few months. The Nifty IPO Index is down 11 per cent this month,” he said.
The impact comes as the ₹30,213 crore Jio Platforms IPO, the largest in India’s capital market history, continues to attract strong investor interest.
Not all the effects have been negative, however. “The Jio IPO has actually helped support the rupee because inflows from institutional investors are entering the system,” said a currency dealer, adding that the inflows have helped offset some of the pressure arising from higher crude oil prices.
Over the first two days of bidding, foreign institutional investors placed bids worth nearly ₹25,000 crore for Jio Platforms shares. According to dealers, strong IPO related inflows initially supported the domestic currency before demand for dollars from the RBI and state-run banks weighed on the rupee on Thursday. The rupee strengthened to 94.3 against the US dollar in morning trade before settling at 94.8, down 41 paise from Wednesday’s close of 94.4.
After two days of bidding, the Jio Platforms issue was subscribed 5.6 times, with investors seeking 110 crore shares against the 19.7 crore shares on offer.
The strongest demand came from qualified institutional buyers (QIBs), who bid for 65.1 crore shares, or nearly 13.3 times the 4.9 crore shares reserved for the category. Retail investors bid for 13.1 crore shares, representing 1.6 times the allotted portion, while banks, financial institutions and insurance companies sought 34 crore shares.
Published on October 22, 2026
