Secondary component continues to dominate IPOs with 80% of total proceeds

For a third year in a row, exits accounted for over 80% of total proceeds

Secondary share sales continued to dominate the initial public offering (IPO) market. For the third year in a row, the share of secondaries was more than 80 per cent in the total IPO proceeds for the year 2019-20. In fact, the secondary pie has grown every year since 2014-15 from 41 per cent to 88 per cent for the just concluded financial year.

High secondary sales isn’t a bad thing. It provides exits to private equity investors, freeing up capital to invest in newer companies. It also helps promoters liquidate some of their holdings, thus incentivising them to list. However,