Indian Stock Market Analysis: January 22, 2026

Introduction

Indian equity markets staged a robust recovery on Thursday, January 22, 2026, successfully snapping a three-day losing streak that had dampened investor sentiment earlier in the week. The BSE Sensex surged 398 points (0.49%) to close at 82,307.37, while the Nifty 50 gained 132 points (0.53%) to settle at 25,289.90. This relief rally resulted in the addition of approximately ₹6.6 lakh crore to total investor wealth, driven by a convergence of transformative domestic policy reforms, easing global geopolitical tensions, and a string of powerful corporate earnings reports.

For retail investors, the day was defined by a shift toward a "risk-on" sentiment. Markets reacted positively to SEBI's groundbreaking decision to slash IPO float requirements for mega-cap companies and the long-awaited progress toward the National Stock Exchange (NSE) listing. Additionally, a framework deal involving the United States and NATO regarding Greenland provided a much-needed cooling of global trade fears. As we approach the Union Budget 2026-27, the market appears to be positioning itself for a period of structural evolution.

1. Policy Reforms: SEBI Ushers in Era of Mega Listings

IPO Float Requirement Slashed for Large Companies

In what is being hailed as a transformative policy shift, the Indian government has approved a SEBI proposal to significantly reduce the minimum public float requirement. For companies valued above ₹5 lakh crore (approximately $57 billion) post-listing, the requirement has been reduced to 2.5% from the previous 5%.

This reform is strategically designed to facilitate "Mega IPOs" that might otherwise overwhelm the market's liquidity. By lowering the entry barrier for public shareholding, SEBI aims to prevent massive share offloads from distorting market price discovery.

• Reliance Jio’s Path Cleared: This move directly benefits the highly anticipated Reliance Jio Platforms IPO. Analysts suggest the company could raise over $4 billion, making it the largest-ever listing in Indian history. A 2.5% float allows Reliance to retain majority control while satisfying regulatory listing standards.
• Global Benchmarking: This shift brings India in line with international standards seen in markets like Saudi Arabia (Aramco) and New York (Alibaba), where mega-cap entities often list with lower initial floats to manage absorption capacity.

NSE IPO: The Decade-Long Wait Nears Conclusion

After a 10-year regulatory delay, the National Stock Exchange (NSE) IPO is finally moving into its final stages. SEBI Chairman Tuhin Kanta Pandey confirmed on January 10, 2026, that the regulator is at an "advanced stage of issuing the No Objection Certificate (NOC)," with a possible issuance within January 2026.

The listing of the NSE is viewed as a watershed moment for Indian capital markets, promising enhanced transparency and providing retail investors an opportunity to own a piece of the nation’s primary market infrastructure.

2. Banking Sector: Addressing the Deposit-Credit Mismatch

Banks Seek 3-Year Bulk Deposit Approval

Indian lenders are collectively engaging the Reserve Bank of India (RBI) to request an extension for Certificates of Deposit (CDs) or bulk deposit tenors. Currently capped at one year, banks are seeking approval for tenors up to three years.

This request stems from a widening gap between credit and deposit growth. As of the fortnight ended December 31, 2025, bank deposit growth stood at 12.7%, significantly trailing the 14.5% credit growth. Furthermore, short-term funding has become expensive, with one-year CDs hitting 7.00%, the highest rate of FY26. Longer tenors would allow banks to stabilize funding costs and improve Asset-Liability Management (ALM).

PSU Banks Lead the Rally

Public Sector Undertaking (PSU) banks were the standout performers on January 22, driven by strong quarterly results and Budget-related optimism.

• Bank of India: Surged 4.75%
• Canara Bank: Gained 2.26%
• Indian Bank: Reported a net profit of ₹3,061 crore (+7.3% YoY), with its Gross NPA improving to 2.23% compared to 2.60% in the previous quarter. The bank also saw a 20% YoY surge in other income.

3. Corporate Earnings: Blockbuster Results vs. Disappointments

Waaree Energies: The Solar Sector Giant

Waaree Energies delivered a record-breaking Q3 FY26, reinforcing its position as India's premier solar module manufacturer. The company's shares surged 12% to reach ₹2,713, with a market capitalization of approximately ₹69,580 crore.

Q3 FY26 Financial Table:

Operational highlights include achieving a production rate of 52 modules per minute, making it the first Indian manufacturer to exceed 1 GW of module production in a single month.

Mixed Earnings Performance Across Sectors

While the renewable sector shined, other results were varied:

• Top Gainers: Ujjivan Small Finance Bank (Profit +71%), Radico Khaitan (Profit +62.3% on premium liquor demand), and APL Apollo Tubes (Profit +43% on record volumes).
• The Disappointments: Bandhan Bank saw profits crash 51.6% to ₹205.6 crore, missing analyst estimates. IIFL Finance shares plummeted 15% despite profit growth, following news of tax department scrutiny orders.
• Quick-Commerce Scrutiny: Eternal Ltd (formerly Zomato) reported a 56.9% QoQ profit jump to ₹102 crore. However, investors remained cautious about the long-term profitability of Blinkit and the news of founder Deepinder Goyal sacrificing ₹1,000 crore in ESOPs during his transition from the CEO role.

4. Global Context: The "TACO" Effect and Trade Hopes

Markets globally found relief as US President Donald Trump announced a framework deal with NATO regarding Greenland. More importantly for India, the US withdrew threats to impose tariffs on the European Union that were slated for February 1, 2026.

Analyst Dr. VK Vijayakumar described this pattern as "Trump Again Chickens Out (TACO)," referring to the President's tendency to issue aggressive threats followed by rapid de-escalation.

Key Impacts:

• India VIX: Cooled to the 13 level, signifying lower expected volatility.
• Currency: The Indian Rupee strengthened to 91.63 per US dollar, ending a six-day losing streak.
• Trade Breakthroughs: Comments from the World Economic Forum in Davos regarding a potential US-India trade deal boosted export stocks like Gokaldas Exports and Avanti Feeds, both rising over 5%.

5. Market Technicals and Institutional Flows

Despite the daily gain, technical indicators suggest a balanced but cautious outlook for the near term.

• Support & Resistance: The Nifty found strong support at its 200-day Moving Average (DMA) of 25,130. Immediate resistance is seen at the 100-DMA of 25,590, with a further target of 25,700.
• Put-Call Ratio (PCR): Currently at 0.70, indicating a neutral to slightly bearish sentiment in the options market.
• FII/DII Activity: Foreign Institutional Investors (FIIs) remain net sellers, offloading ₹22,420 crore in the first half of January 2026 alone. The FMCG sector has been hardest hit, seeing outflows of ₹6,128 crore.

6. Key Takeaways

• Market Growth: The rally added ₹6.6 lakh crore to investor wealth, with the Nifty settling at 25,289.90.
• IPO Landscape: SEBI's new 2.5% float rule for companies over ₹5 lakh crore valuation clears the path for Reliance Jio and other mega-listings.
• NSE Update: The NSE IPO is at an advanced stage, with an NOC expected by the end of January 2026.
• Solar Powerhouse: Waaree Energies more than doubled its revenue and profit YoY, maintaining an massive ₹60,000 crore order book.
• Banking Shift: Lenders are seeking 3-year CD tenors to bridge the 1.8% gap between credit growth (14.5%) and deposit growth (12.7%).

What This Means for Investors

As the Union Budget 2026 approaches on Sunday, February 1, investors should monitor the market's "pre-budget positioning." Historical trends indicate that sectors like PSU Banks, Infrastructure, and Renewables often see heightened activity during this period. Data suggests that while FII selling remains a headwind, domestic liquidity and policy clarity are providing a significant floor for valuations.

Investors may consider monitoring the NSE IPO timeline and the impact of the new float rules on liquidity in the large-cap segment. However, the India VIX at 13 suggests that while volatility has cooled, any reversal in the US-India trade dialogue or a shift in the Bank of Japan's policy decision on January 23 could re-introduce price swings.