PUBLIC OFFERINGS OF SECURITIES INSURANCE [POSI)

Indian Stock Exchanges (BSE, NSE, SMEs) ranked 12th in the world in terms of the number of IPOs in YTD 2021.

- Sweta Agarwal

An Initial Public Offer (IPO) is the first sale of shares to the public by a privately owned company. The companies going public raises funds through IPO for working capital, debt repayment, acquisitions, and a host of other uses. An investor can apply for IPO Stocks in India by filling an online IPO application offered by the stockbrokers and banks.

Though India is now more attractive for growth-seeking foreign capital given the recent decline in China's stature as an investment destination, yet volatile market conditions have led to a significant slowdown in the IPO market during the first quarter of 2022. The other factors contributing to the slowdown are geopolitical tensions, price correction in overvalued stocks, growing concerns about a rise in commodity and energy prices, the impact of inflation and potential interest rate hikes, as well as the covid-19 pandemic risk continuing to hold back full economic recovery. Once the current scenario settles, a lot of IPOs may start coming to the markets in the next 3-6 months, especially those who have chosen to park their public offerings until the markets stabilize.

Companies planning to raise funds through IPO are a mix of traditional companies with long track records as well as newer age companies across various sectors such as consumer, pharmaceuticals, technology, logistics and financial services.

IPOs are a marketing event for the issuer. Given the hype pre-IPO with most companies, there is an increased scrutiny and accountability post-raising of capital. Paytm, Zomato, Kalyan Jewellers India, Reliance Power, ABSL AMC are few of the popular IPOs which failed the stock prices of the company did not meet the valuation at which the stock was listed. More than 40% of IPOs this year have failed in the first half of the year itself, more so, the START-UPS. Is the management up to such challenge?