IPOs Take A Hit In 2019 Amid Stock Market Highs

In the year 2019, the stock market has crossed new highs but the market of new companies in the corporate world has been cold. Particularly small companies are worst hit by the slowdown

The initial public offering or IPO of new companies has been less than a third this year compared to the last year. More than 33 thousand crores worth of IPOs came in the market in 2018, which has reduced to less than 13 thousand crores in 2019. In fact, 2019 has been the worst in the last five years by IPO. In 2019, IPO companies worth Rs 51,000 crore did not enter the market even after taking approval from the Securities and Exchange Board of India (SEBI).

According to SEBI data, a huge decline has been witnessed in the IPO of Micro, Small, and Medium Enterprises (MSMEs). Last year, 141 small companies hit the IPO market of Rs 2287 crore and this year only 50 companies launched IPOs worth Rs 621 crore. That means less than one third. It is clear that the market of big companies is on the upswing and small companies are struggling.

Initial public offering (IPO) or stock market launch is a type of public offering in which shares of a company are sold to institutional investors and usually also retail (individual) investors. An IPO is underwritten by one or more investment banks, who also arrange for the shares to be listed on one or more stock exchanges. Through this process, colloquially known as floating, or going public, a privately held company is transformed into a public company.