Deconstructing the IPO boom

A couple of months ago, I had written about how the year 2017 is shaping up to be an IPO heavy hitter. By October, over Rs 40,000 crore was raised through IPO. Now, as the year ends, we find that the year has turned out to be an all time champion in collecting money from the public. More than Rs 67,000 crore was collected via IPOs during the year. In the last ten years, the second highest such collection was around Rs 37,000 crore, which means that last year's collection was 80 per cent higher than the second ranked year. In fact, this year's IPO investment was higher than the total cumulative collection of 2011-2016! Such numbers are great news for the capital markets investors and the economy in general. However, a closer look reveals a somewhat nuanced picture. When one looks at the actual companies, promoters and industries that make up this impressive numbers, then what unfolds is a bit more complicated. For one, this IPO number basically reflects the best effort that