What Ails India's IPO Market?

Gupta of ISB says the critical phase is now. "Although there may have been signs of investor greed in the IPO process last year, investor fear may do more damage than investor greed."

According to Haldea of Prime, public issues may reach Rs. 75,000 crore ($19.7 billion) in 2008, a new record. This includes Rs. 60,000 crore ($15.8 billion) of IPOs and Rs. 15,000 crore ($3.9 billion) in follow-on offers. The study was done before the market went into a decline. But with a recovery in sight, the figure is unlikely to change very much. Unless, of course, the bears win back the advantage.

Fear rules today, but it's not clear for how long. "Everyone suffers from a memory loss," says Ramu of Puravankara. "All the investors -- and new ones -- will be back." Suchanti of Concept is a little more pessimistic. "I am going on a holiday," he says.

Editor's note: India-focused stock funds that are available in the U.S. include the India Fund (IFN Quote) and the Morgan Stanley India Investment Fund (IIF Quote).

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