BT500: Is there a way to get confirmed allotment in IPOs? Here's what Axis Capital's Salil Pitale says

The calendar year 2023 has seen a slew of initial public offerings (IPOs). Out of them, Tata Technologies' initial share sale could be termed as the most anticipated one, which later went on to make a blockbuster debut. Those who got the IPO allotment were on cloud nine while those who didn't get were obviously disappointed, given the strong listing gains.

That begs the question of there is a sure shot way to wealth via IPOs? Salil Pitale, MD & CEO at Axis Capital, has underlined certain checks and balances that one must adhere to before applying for an IPO. Speaking with Shailendra Bhatnagar, Chief Analyst and Editor, Markets, Business Today TV, at the BT500 Wealth Creators Summit, hosted on December 13 in Mumbai, Pitale said one should look at the company's anchor book, involved insurance companies and bankers. Always plan for long haul instead of expecting a massive listing day pop, he added.

When asked about an absolutely certain method to get a successful IPO allotment, he had very prompt response. "Just look around for the nearest temple ... Siddhivinayak is not too far," the market veteran said on a lighter note.

The exclusive session, titled 'The Way to Wealth via IPOs?', also featured Manisha Girotra, Chief Executive Officer at Moelis India, Pranav Haldea, Managing Director at PRIME Database Group and Dhiraj Relli, MD & CEO at HDFC Securities.

Pitale also spoke on the myth that an offer for sale (OFS) is usually considered as negative. "OFS being a large component means that a company which is going to the market doesn't need the capital. And, therefore it is not unnecessarily taking the capital. They've built a business out using either promoter or private equity (PE) money. Taken all the risks of building a business and once it is well built, they are coming into market. Built-out businesses hitting the market is a big strong point," the Axis Capital MD & CEO stated.

He also cited Tata Tech IPO as an example. For the unversed, the initial share sale was entirely an OFS.

Pitale further mentioned that 90 per cent of the IPO, which came this year have done well. Another 65 IPOs are in the pipeline, he added.

On SME IPO, Manisha Girotra from Moelis India said investors should choose companies with clean balance sheet, high quality bankers and management standards.

PRIME Database's Pranav Haldea underscored that 2023 has been a stellar year for SME IPOs as well. He suggested that minimum threshold for retail investors in a SME IPO could go up.

To conclude, Dhiraj Relli from HDFC Securities said: "Investor should invest post-IPO. Some of the IPOs have performed well post-listing also. One should look at good businesses and stay invested in those." He cited IREDA (Indian Renewable Energy Development Agency) shares as an example. On Wednesday, the stock settled 10 per cent higher at Rs 112.16 on BSE.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)