Fewer shareholders are exiting via IPOs on valuation blues

Amid a crowded listing pipeline, muted investor feedback, and lower-than-expected valuations, several companies are trimming the offer-for-sale (OFS) portion of their upcoming IPOs (initial public offerings), industry experts told Mint.

- Mansi Verma & Sneha Shah

Investors in companies like HDB Financial, Ather Energy, and NSDL have scaled back their stake sales, opting to wait for post-listing exits through block deals and secondary sales. The latest in the queue are Bluestone, Smartworks and Indiqube.

Stake sales in upcoming IPOs by SK Finance and LG may also be trimmed, according to people familiar with the matter who did not wish to be identified. Queries sent to both companies did not elicit a response at the time of publishing.

Further, given the steep corrections most 2021-vintage IPOs faced after listing at inflated valuations, bankers are now urging companies to adopt more rational pricing and leave enough on the table for incoming investors.

In Bluestone's case, private equity investors Accel and Kalaari have pared their OFS component, while IvyCap Ventures has withdrawn from the sale entirely.