India: IPO boom being driven by need for exits, not growth capital

Ujjivan has recently sold about 12.6 million shares to 17 domestic institutional investors at Rs210 per share. Photo: Hemant Mishra/Mint

Here is yet another indicator that private investment demand is yet to take off in India. The rush of new share sales this year has very little to do with raising growth capital, but with promoters and early-stage investors cashing out.

A Mint analysis shows that two-thirds of the money raised through initial public offerings (IPOs) in 2016 went towards offers for sale—essentially exits for existing investors.

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