In 2023, small-cap IPOs will be the first choice of investors


MUMBAI: In the coming 2023, it is expected that small-sized IPOs will be the main choice for investors instead of large-sized initial public offerings (IPOs). A Bank of America analyst said that the investors who were talking about the price of large-sized IPOs in 2022, especially the prices of technology shares, were going crazy soon after the listing, will now prefer small-sized offerings.

Given the investor mood, companies will also prefer to bring in lower valuations and smaller share sizes.

Demand for technology stocks has fallen due to a significant decline in the share prices of several country's start-ups after listing and a rise in global interest rates.

Investors will also prefer to invest in stocks due to the looming threat of a global recession.

At present, as many as 24 companies have applied for IPO before the Securities and Exchange Board of India (SEBI), Sebi sources said.

The fund raising volume next year will also be lower than in 2022, given the high volatility in the stock market, the analyst added.

The $6.90 billion raised through the sale of new shares in 2022 is 60 percent less than in 2021. In the current year, the number of companies that brought IPO increased by ten percent.

Several companies have come under SEBI's watch after the crash in share prices following high valuations. While share prices of companies with high valuations have managed to remain at high levels, BSE SME IPOs have also seen a rise of around 40 per cent in the current year, reflecting the performance picture of small IPOs.


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