Nifty Gains as Indian Markets Navigate 9 IPOs, PSU Bank Resurgence, and Strategic Defense Shifts

On Sunday, February 22, 2026, the Indian equity markets displayed a resilient and cautiously optimistic performance. The Sensex advanced 316 points to close at 82,814.71, while the Nifty 50 gained 117 points to reach 25,571.25. This positive momentum comes at a critical juncture where the market is balancing a massive resurgence in primary market activity, significant corporate restructurings, and a shifting geopolitical landscape that impacts trade and defense.

For retail investors, the current environment is defined by sectoral rotations—most notably the pivot toward public sector banks—and a "Made in India" push in the defense and aerospace sectors that is attracting billions in capital. However, global headwinds, particularly shifting trade policies from the United States, remain a key variable to monitor in the coming weeks.

1. Primary Market Explosion: Nine IPOs Target ₹4,300 Crore

The week starting February 23, 2026, marks one of the most active periods for the primary market in recent history, with nine companies launching their initial public offerings (IPOs) simultaneously.

CleanMax Enviro: The Renewable Energy Anchor

The centerpiece of this surge is Clean Max Enviro Energy Solutions, India’s largest commercial and industrial (C&I) renewable energy provider. The company is seeking to raise ₹3,100 crore through a combination of a fresh issue (₹1,200 crore) and an offer-for-sale (₹1,900 crore).

Key CleanMax IPO Details:

• Upper Price Band: ₹1,053 per share
• Anchor Book: Raised ₹921 crore from institutional giants including Temasek Holdings, ADIA, SBI Life, Nomura, HDFC Mutual Fund, Franklin Templeton, and Tata Investment Corporation.
• Operational Capacity: 2.54 GW operational as of July 2025, with another 2.53 GW under execution.
• Grey Market Premium (GMP): Currently muted at ₹4 (0.4%), reflecting investor caution regarding large-ticket renewable valuations.

Mainboard and SME Offerings

While CleanMax dominates the headlines, other mainboard issues are seeing varied sentiment in the grey market:

In the SME segment, Accord Transformer and Switchgear is the standout performer, with its 37% GMP signaling high demand for power infrastructure components. Conversely, digital-first businesses like Yaap Digital and Mobilise App are trading at par, as investors remain wary of AI-led disruptions in the tech sector.

2. UPL’s Strategic Gambit: The Global Agri Spinoff

UPL Limited, a leader in global agrochemicals, announced a landmark reorganization on February 20, 2026. The company intends to spin off its India and international crop protection businesses into a new listed entity: UPL Global Sustainable Agri Solutions.

The Restructuring Roadmap

This process is expected to take 12 to 15 months and involves three distinct steps:

1. Merging UPL Sustainable Agri Solutions (India platform) into the parent company.
2. Demerging the consolidated India business into UPL Global.
3. Amalgamating UPL Crop Protection Holdings (international arm) into UPL Global.

This move aims to create the world’s second-largest pure-play crop protection company. By separating the high-growth biologicals and specialty chemicals segments from the cash-generative crop protection business, UPL hopes to eliminate the "conglomerate discount" and allow for independent capital structures.

3. PSU Banks: The New Favorites of Foreign Investors

In a significant shift in market leadership, public sector undertaking (PSU) banks have outpaced their private sector counterparts in 2026, gaining 12% year-to-date. Foreign Portfolio Investors (FPIs), who traditionally favored private giants like HDFC Bank, are increasingly moving capital toward State Bank of India (SBIN) and Bank of Baroda.

The Credit-to-Deposit (CD) Advantage

The primary driver of this trend is the divergence in liquidity metrics. While the overall system CD ratio has risen to 82%, the impact is not uniform:

• Private Banks: CD ratios are between 90% and 92%, leaving little room for aggressive lending.
• PSU Banks: CD ratios sit comfortably between 74% and 75%.

This 15-17 percentage point cushion allows PSU banks to grow their loan books without the immediate need to raise expensive deposits. For instance, Bank of Maharashtra reported a 26.5% YoY net profit surge to ₹1,779 crore in Q3, underscoring the earnings momentum in the sector.

4. Trump’s Tariff Volatility and Export Risks

Global trade dynamics shifted on February 22, 2026, after US President Trump raised temporary import duties from 10% to 15% using Section 122 of US trade law. This followed a Supreme Court ruling that struck down his previous broad tariff program.

Impact on Indian Exporters

• IT Services: The IT index is already down 12% in 2026 due to AI concerns; additional US tariffs create further demand uncertainty.
• Pharma & Textiles: While the India-EU FTA provides a buffer by eliminating tariffs (up to 11% in pharma and 22% in textiles), the US remains a critical market where 15% duties could squeeze margins.
• Trade Framework: Investors are awaiting clarity on how these universal tariffs will interact with the India-US interim trade framework, which had previously established reciprocal tariffs at 18%.

5. Defense Sector: A ₹3.6 Trillion Modernization Drive

India's defense sector is witnessing a multi-year growth cycle fueled by indigenous manufacturing mandates. Recent developments have solidified this trend:

• Rafale Deal: The procurement of 114 Rafale jets was cleared, with 90 units to be built in India.
• BEL-Safran JV: Bharat Electronics (BEL) and France’s Safran formed a 50:50 joint venture for indigenous manufacturing of HAMMER weapon guidance kits.
• Adani-Leonardo Alliance: A strategic partnership to build an Indian helicopter ecosystem, targeting a demand for 1,000+ units over the next decade, including AW169M and AW109 TrekkerM models.
• Tata-Airbus: Inaugurated an H125 helicopter assembly line in Karnataka.

Defense stocks like HAL, BDL, and Data Patterns have responded positively, with BEL currently trading 81% above its 52-week low.

6. Regulatory Changes in Brokerage Funding

The RBI has introduced revised bank exposure rules for capital market intermediaries, effective April 1, 2026. The new rules mandate that bank credit to brokers must be 100% secured and strictly prohibit the financing of proprietary trading.

While the industry body ANMI has expressed concerns over potential liquidity crunches, some analysts view the clarification on Margin Trading Facility (MTF) lending as a positive. Banks can now lend against MTF books at an estimated 40% haircut, providing a more structured funding route for retail-focused brokers like Angel One and ICICI Securities.

7. Novartis India Exit and PE Interest

Novartis AG is exiting its 70.68% stake in Novartis India Limited for approximately ₹1,446 crore ($159 million). The stake is being acquired by a consortium led by ChrysCapital at a price of ₹860.64 per share.

This deal highlights two major trends:

1. Multinational corporations (MNCs) are streamlining global portfolios (Novartis recently committed $23 billion to US manufacturing).
2. Private Equity (PE) firms are aggressively targeting Indian healthcare assets for consolidation.

8. Macroeconomic Indicators and Market Outlook

GDP and Earnings

ICRA projects India’s Q3 FY2026 GDP growth at 7.2%, a slight moderation from the 8.2% seen in Q2. Despite this, corporate profits remain strong, with India Inc reporting a 14.7% YoY increase in Q3. However, new labor codes have impacted these figures, as companies adjusted for higher gratuity liabilities due to mandated salary structure changes.

Commodity and Currency Levels

Key Events for the Week Ahead

• India-US Trade Deal: Scheduled signing could clarify the tariff situation.
• GDP Data: Official release will influence RBI's monetary policy stance.
• IPO Subscriptions: High-volume week will test retail and institutional liquidity.
• Surya Grahan (Feb 23): Traditional investors may show subdued activity during the solar eclipse.

Key Takeaways

• PSU Banks over Private: The liquidity advantage of PSU banks (CD ratio ~75%) makes them a safer bet for growth in a high-interest environment compared to private banks (CD ratio ~92%).
• Defense is Long-term: With ₹3.6 trillion in packages and multiple global JVs (Safran, Leonardo, Airbus), defense stocks have visible order books for the next decade.
• Export Caution: Watch for volatility in IT and Pharma as the US implements 15% temporary tariffs.
• IPO Diligence: While SME IPOs like Accord Transformer show massive premiums (37%), mainboard issues like CleanMax are seeing more sober valuations.

What This Means for Investors

Historical trends indicate that periods of massive primary market activity often coincide with secondary market consolidation. With the Nifty facing resistance at the 25,850-25,900 level, investors may consider a "wait and watch" approach for new entries in export-heavy sectors while monitoring the steady performance of domestic-focused themes like PSU banks and defense.

The divergence between the robust domestic economy (7.2% GDP) and global trade turbulence suggests that portfolios should be balanced between growth (Renewables, SME) and stability (PSU Financials). Monitoring the India-US trade deal signing will be crucial for managing risk in IT and Pharmaceutical holdings.