New Delhi: “Uncertain market conditions may dampen the growth of domestic IPO market as increasing number of foreign funds are shying away from investing here and companies are postponing their fund raising plans through primary market,” says a study.

“FIIs and other relevant financial institutions, including retail investors, are gradually withdrawing their subscription from IPOs, given the current situation and are exploring other options such as bonds and mutual funds,” a study by industry chamber Assocham said.

“FIIs are pulling out of IPOs because of high inflation, debt and bond market is growing for them phenomenally. The price band of IPO is also no longer attractive for retail investors,” Assocham President Sajjan Jindal said.

The domestic stock market barometer Sensex, which touched a high of 21,077.53 points in January, has been witnessing a slump ever since and had plunged the year’s low of 12,514.02 points in July.

“Under such circumstances, being optimistic about IPO market would not be realistic as fear factor is becoming more visible and pronounced against the primary market,” Jindal added.

“Domestic IPO market, which grew consistently at 20% during 2003 to 2007, may expand 8-10% in remaining period of the current fiscal despite vigorous efforts put in by merchant bankers as adverse market sentiments have gained grounds,” the study said.

“At least 74 companies, who were close to coming out with an IPO and collectively raising about Rs44,000 crore are now awaiting better times,” Assocham said.