Understanding the IPO debate beyond headlines
The recent discussion triggered by a viral video featuring Sanjeev Prasad , Co-Head – Institutional Equities at Kotak Institutional Equities, has reignited scrutiny of India’s IPO markets. Prasad highlighted that over the past five years, roughly 40% of IPO proceeds have gone to promoters and early investors, while only around 15% has been deployed toward capital expenditure—suggesting limited contribution to real economic asset creation. His statement resonated widely, reflecting growing investor unease over whether public equity markets are increasingly serving as exit avenues rather than engines of new growth. While the concern is valid and deserves examination, the broader picture is more nuanced than a headline statistic reveals. The Concern: Is the IPO market becoming exit driven? The disproportionate share of Offer for Sale (OFS) raises legitimate questions: · Are IPOs being priced and marketed primarily to facilitate stake...