A resurgence in using IPOs for funding expansion plans marks a shift in India Inc’s approach.
After more than a decade, Indian companies are increasingly turning to initial public offers (IPOs) to fund capital expenditures and expansion plans, rather than merely providing exit options for investors like private equity and venture capital firms. According to Money Control, In the current year to date, a significant portion of IPO fundraising has come from the issuance of fresh shares, with the offer for sale (OFS) component taking a backseat.
So far, 43 firms have raised approximately Rs 47,872.31 crore through IPOs, with 51.51 percent of this amount coming from fresh issues—the highest since 2012. Fresh issues alone have brought in around Rs 24,657.64 crore, the most in three years, while Rs 23,214.67 crore has been raised via offer for sale. The OFS component involves existing shareholders offloading their shares as part of the public issue, with the proceeds going to the selling shareholders rather than the company.
This trend highlights a strategic shift as India Inc prioritizes using IPO proceeds for growth and expansion, reflecting a broader confidence in the country’s economic prospects.
