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India's CEA Warns IPOs Are Turning Into Exit Ramps, Not Growth Capital

He warned that exit-heavy listings distort incentives, urging development of a deeper bond market.

Overview

  • V. Anantha Nageswaran said recent IPOs increasingly function as exits for early investors rather than raising fresh, long-term capital for companies.
  • From April to September, 55 IPOs raised about Rs 65,000 crore, with most proceeds coming via offer-for-sale components rather than new share issuance.
  • Year to date, 84 companies have raised Rs 1.30 lakh crore through IPOs, with 64% raised through OFS, according to primedatabase.com.
  • SEBI Chairman Tuhin Kanta Pandey responded that the market should offer varied IPO structures where some investors exit while others raise funds.
  • The CEA cautioned against celebrating market-cap and derivatives milestones, flagged short-run earnings optics, and called for deeper bond markets and more patient domestic capital.