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New Age IPOs - A journey towards something good or a farce? By: Vani Agrawal (B. Com, The Liberal College - Indore)
From a society that was fixated on investing in only gold and creating fixed deposits is now locked within their house and are easily creating multiple demat accounts online for each and every family member to increase their probability to get allotted an IPO in this bull run. This scenario has unfortunately been reduced to a lottery ticket - after all, the connotation has been established that their stock price is going to double on the day the company gets listed.
As of October 2021, in India, there are 7.38 crore demat accounts, more than double that of March 2019. As per MoneyControl, as many as 10 to 30 lakhs new demat accounts are expected to be opened with the upcoming IPO of LIC. With the higher participation of these first-time investors (including high net-worth individuals) analysts are suggesting that companies are going public due to the excellent performance that is currently seen in the stock markets. According to The Economics Times, 63 Indian companies cumulatively raised an all-time high of ₹1,18,704 crore through IPOs in 2021. To put this in comparison, a total of only ₹73,003 crore was generated by IPOs in the last three years combined.
