Even as a long list of initial public offerings (IPOs) hits the primary market, raising questions about valuation, the quality of companies coming to market, and other concerns, Aashish P. Somaiyaa, CEO of Whiteoak Capital Asset Management Company, feels that the criticism is unwarranted.
He believes India needs more listings to provide investors with new opportunities, especially as the economy formalises and scales up. 'We have investors, we have a corpus. We need new ideas and more listings. There's nothing wrong with that,” says Somaiyaa talking to The New Indian Express.
He says the primary market will depend on how the secondary market is behaving and how the mood or the environment is, but we have to get used to listings. He says unlike in the past when unknown companies would come to the primary market and raise money, today companies coming to market are often household names with established governance, financial track records, and independent boards.
He takes the example of insurance and asset management companies, which have been there for 20-25 years, and yet many of them got listed only in the past 5-7 years.
“There will be many sectors with many businesses which will come off the scale and we should be happy to participate. Otherwise, how will we participate in the new sectors? And the last five years have seen new sectors and new ideas like hospitals, diagnostics, import substitution and manufacturing and defence, asset management, Wealth Management, FinTech, consumer tech, etc,” he says.
On the question of the quality of companies getting listed on the exchanges, Somaiyaa says even if one or two IPOs go bad, there is a lot more discussion about it because there is a lot more awareness in the market. “But just because there is more discussion and more awareness doesn't mean that the quality has become worse. In fact, the quality of IPOs was worse in the 90s, but that time, there was not enough awareness and discussion and participation,” says Somaiyaa.
According to the Whiteoak Capital AMC CEO, after a tepid run in the primary markets since the beginning of the year, a resurgence in IPO activity would be seen by late 2025 or early 2026.