It’s raining IPOs in the country. This year 54 companies will bring IPO. Out of these, about 35 IPOs have been launched. The companies have so far raised 42 thousand crores. It is estimated that up to Rs 1 lakh crore can be raised through IPO this year. Zomato surprised the most in the IPO that came so far this year. After the listing of the shares of this internet platform company, the price increased by 80 percent. This IPO got tremendous response from the subscriber. This situation is in stark contrast to the situation in 1993, when the IPO of Infosys was not given any value to the investors.
Dhirubhai launched the first IPO of independent India
The IPO market in the country is in full swing today. A large number of new investors are investing money in it. Meanwhile, the IPO market has gone through several phases. In 1977, Reliance Industries Limited launched the first IPO of independent India. The issue size was Rs 2.82 crore. Reliance’s founder Dhirubhai Ambani launched four big IPOs within five years after economic liberalization in 1991. Everyone got a very good response but investors did not get much benefit. Later, all these companies that brought IPO got merged into Reliance Industry Limited (RIL).
Fake companies flooded in IPO market
SEBI was formed in 1992 and then four months later the Capital Controller of Issues (CCI) was dissolved. It was the pricing body of the issue. Companies took advantage of this and between 1991 and 1992, 195 IPOs were launched at arbitrary issue prices. Even after this, a large number of IPOs came. Promoters benefited a lot from this, but investors were in huge losses. At that time, most of the companies that raised money from the primary market are not even known today. It was only after this that reforms in the primary market began to curb fake companies and such practices.
….when Infosys IPO did not get the price
According to a Livemint report, Infosys brought its IPO in 1993. But it did not get good subscription. After this the IPO of Wipro and TCS also came. Among the IT companies that were listed after the IPO, Infosys has been at the forefront of making profits. In 1996, if someone had invested Rs 100 in Infosys shares, it would have become Rs 1.67 today.
2005 scam and Operation Clean-up
In 2005, a big scam came to the fore in the IPO market. It was called IPO Demat Scam. Some companies have increased the allotment of the issue by opening thousands of fake depository accounts. Operation clean-up started after the scam was discovered and several rules related to the IPO were changed. In this, the financial track record of the company and the disclosure of the promoter were made mandatory. The minimum public shareholding was fixed so that a sufficient number of shares could be circulated among the common investors. Share reserves were kept for institutional investors so that they could take stake in the IPO. Also, a code of conduct was created for advertising. This brought a lot of transparency in the IPO market. An advantage of this was that the size of the fund to be raised from the primary market increased continuously.
Internet IPOs: Keep in mind before investing in IPOs of Internet companies like Paytm, decide on subscription based on these five points
Zomato Era of IPOs
The spectacular listing of online food delivery company Zomato in the country’s stock market paved the way for Internet platform companies to enter the IPO market in a big way. Although big investors are investing a lot in all the internet companies, but all of them are in loss. In such a situation, the tremendous response of investors to the IPO of Zomato, which has been continuously losing, is a new phenomenon. However, to bring such start-ups into the IPO market, SEBI has also made some changes in the rules. However, after Zomato, now giant Internet companies like Paytm and Mobikwik are also going to enter the IPO market soon.