NEW WAVE OF TECH IPOs LEAVES RETAIL INVESTORS AT RISK

The Indian stock markets are bracing for another wave of what the fashionable set calls 'digital IPOs'.

- DHIRENDRA KUMAR

The definition keeps evolving with each new buzzword—platform, Al, technology-enabled, and soon. My definition is simpler and more accurate: companies that have never made profit and probably never will.

The real damage from these unprofitable digital companies goes far beyond individual investors losing money in overpriced IPOs. It strikes at the heart of how market economies are supposed to function. Why does a market economy generate more wealth and growth than a controlled one? The reason is failure. The greatest advantage of a market economy is not just that good businesses succeed, but that the bad ones fail. Businesses that cannot make money are forced to shut down quickly, freeing up resources of all kinds that flow into good businesses.