IPOs becoming exit vehicles for early investors, rather than tool for raising long

With a surge in companies going public, Chief Economic Advisor V Anantha Nageswaran on Monday raised concerns that initial public offerings (IPO) are increasingly being used as exit routes for early-stage investors rather than an instrument for raising long-term capital. ARTICLE CONTINUES BELOW VIDEO

“India’s equity markets have grown impressively, but initial public offerings have increasingly become exit vehicles for early investors, rather than mechanisms for raising long-term capital. This undermines the spirit of public markets,” Nageswaran said during the CII Financing Summit.

When asked about his comments on the issue during the same event, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey said all types of options should be made available to investors in