India has been witnessing a bull market for the past 1.5 years, so it is no surprise that companies are utilising this opportunity to enter the market. Just in 2021, Dalal Street has seen around 46 IPOs! Paytm has joined the list as it opened for subscription on November 8, 2021. With an issue size of Rs 18,300 crore, Paytm has dethroned Coal India to become India's biggest IPO in over a decade. But where are these companies right now?
The most interesting aspect of all these issues is that except for Zomato and Yes Bank's FPO (Further Public Offering), a major chunk of the issue of all other companies were offers for sale. An offer for sale is a mechanism through which a company's promoters can offload their stake or even exit the company. An offer for sale issue does not affect the company or its business in any way except for being listed. Out of the total Rs 1,00,030 crore raised by these 10 companies, around Rs 72,041 crore was OFS, a staggering 72 per cent.
Now Paytm will join this list as a topper with an IPO of Rs 18,300 crore, once again out of which Rs 10,000 crore is an offer for sale. It is important for investors to distinguish between a fresh issue and an offer for sale, as the former will benefit the company and the latter will not.