Heavy IPO supply is keeping Indian stock valuations in check, says ICICI Prudential's Anand Shah

Anand Shah of ICICI Prudential AMC says India's wave of new listings is keeping stock valuations reasonable rather than signaling excess. He also flags a shift away from consumer brands toward disrupted sectors like autos and paints, and outlines a cautious but selective view on IT stocks.

According to Shah, the substantial supply of new IPOs in the Indian market is helping to keep overall stock valuations in check. Rather than interpreting the heavy pipeline of new listings as a sign of market excess or froth, he views it as a mechanism that keeps share prices reasonable, as new supply meets investor demand. The framing comes amid a busy period for Indian primary markets, where companies across consumer, technology, and infrastructure sectors have tapped public markets for capital, giving fund managers a wider menu of listings to choose from.

Beyond his comments on IPO supply, Shah highlighted a portfolio shift underway at ICICI Prudential: moving away from consumer brand companies toward sectors undergoing disruption, such as automobiles and paints. These industries, he indicated, present opportunities driven by the changes reshaping them. Both sectors have seen notable competitive dynamics in recent years — the automobile industry is being reshaped by electrification and new entrants, while the paints sector, long dominated by a small number of incumbents, has faced new competition following the entry of large conglomerates such as Grasim Industries and JSW Group into decorative paints.

On information technology stocks, Shah struck a cautious but selective tone, suggesting the fund house remains discerning about where it allocates within the IT services space. Indian IT services companies, which derive much of their revenue from overseas clients, have faced a period of uneven client spending in global markets, a backdrop that has weighed on the sector's growth outlook.

His remarks were made in an interview with CNBC-TV18, reported by Prashant Nair (author page, X (Twitter)), with additional reporting by Nigel D'Souza (author page) and Mangalam Maloo (author page). The original article is available on the CNBC-TV18 website.

The discussion also touched on new-age companies, with Eternal Ltd (formerly known as FSN E-Commerce Ventures, associated with Nykaa) among the names referenced in market coverage of the segment. New-age or internet-first listings have been a recurring feature of the recent Indian IPO cycle, drawing attention as investors weigh their path to profitability against their growth trajectories.