Pre-IPO allotments lose favour amid market buoyancy and larger float sizes

Opt to sell shares during IPO instead on hopes of better valuations

Pre-initial public offering (IPO) allotments have lost favour amid buoyancy in the market and increase in average float size this year.

After hitting a record high in 2023, they have come to a halt, with just three companies opting for such placements totalling Rs 235 crore. This compares to eight deals worth Rs 648 crore during the same period of the previous year.

Bankers said pre-IPO allotments are opted for by companies with smaller issue sizes to accommodate sticky investments from cornerstone investors.

“In smaller-sized issuances, investors get too little in the anchor because of the size