An advisory has come from the SEBI chairman on behalf of IPO investors, in which he has said that retail investors should invest in IPO on the basis of research and not by emotion. Speaking at the Financial Markets Summit of CII, he said that more retail investors would join the market now. T+1 settlement will be beneficial for all the market participants.
He further said that the price discovery in the primary market is not as transparent and accurate as that of the secondary market. Retail investors should focus more on the secondary market. Because more information is available about the secondary market.
Significantly, with the strong recovery in the secondary market and the revival in the economy, there was a flurry of IPOs in the Indian market. So far in 2021, 41 companies have raised Rs 64,244 crore through IPO. Out of this, there are 16 stocks which are trading above their issue price. So far in the financial year 2022, almost the same amount of money has been raised through the IPO as it was raised in the entire financial year 2021.
The SEBI chairman also informed that Rs 46,000 crore was raised through IPO in FY21. At the same time, during the last 18 months, technology companies have raised Rs 15,000 crore through IPO. Ajay Tyagi also told that papers have been filed for IPO of Rs 30,000 crore in SEBI.
From the perspective of subscription and listing for the year 2021, most of the IPOs of 2021 can be called successful, but some people in the past do not agree with this. According to data from JSP Investments, the IPO data for the last 5 years shows that most of the money raised from the primary market has come through offer for sale. This means that most of the money from the IPO has gone into the pockets of the promoters and shareholders of the companies. This money has not been used for expansion plans. So that the economy and common shareholders are not benefited.
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