‘Avoid cos where promoters pull cash amid capital needs’

Kela’s remarks come at a time when IPOs in 2025 are dominated by offer-for-sale issues

- Srushti Vaidya

Madhusudhan Kela said investors should focus on a company's fundamentals instead of who buyers or sellers are in an IPO.

Ace investor Madhusudan Kela is clear about one thing: he won't buy into a company if a promoter is paring stake at a time when the business itself requires capital.

His comments come in a year marked by intense debate over initial public offerings (IPOs) that have been used largely as exit routes for promoters and private equity backers.

“If a promoter is taking money out at a time when the company itself needs capital, I would never touch that company,” Kela said at the Mint BFSI Conclave on 12 December.

However, he emphasized that exits are not a concern if the company does not require fresh capital, and the public issue is attractively priced. “If the promoters are ethical and the issue is done in a transparent manner, it doesn’t matter to me who is selling and who is buying.”

Kela said investors should focus on a company’s fundamentals—whether it offers growth and returns—rather than on who the buyers or sellers are in an IPO.