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No: an IPO does not have to deliver an immediate listing gain to serve a useful purpose. In a Moneycontrol interview published October 13, 2026, Equirus founder Ajay Garg argues that public equity can finance businesses with uncertain outcomes, even though some investments will disappoint. That is his view of what a healthy market should do—not a guarantee that a particular IPO is well priced or will eventually succeed.
Does every IPO have to make money?
Garg’s answer is no. He says equity investors should underwrite risk and give businesses time to execute, rather than expect every IPO to produce an immediate return. In his view, a healthy IPO market should be willing to finance companies whose outcomes are uncertain: some may fail, while a smaller number may generate outsized returns.
That argument distinguishes the purpose of a market from the result for any one investor. Public equity can fund a company’s growth, but an IPO is not proof that the company will grow, that its shares are fairly valued, or that buyers will profit. A share price can fall after listing, and a business can take longer than expected to deliver on its plans.
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1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesGarg’s interview also cites performance figures for IPOs associated with Equirus. Moneycontrol reported that seven mainboard IPOs were associated with the firm over the preceding year; excluding NSE, the other six were trading above their issue prices when the article was published. It reported Omnitech Engineering at about 200% above its issue price and CMR Green Technologies, described as the weakest performer among those six, at about 11% above issue price. Those are market snapshots from the interview’s publication date, not current returns or evidence that future IPOs will perform similarly. Moneycontrol’s account and figures are available in its October 13, 2026 interview with Garg.
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How does an IPO provide money to a company?
An IPO can combine a fresh issue of new shares with an offer for sale (OFS) of existing shares, or consist of either route. The distinction matters because the proceeds go to different parties:
- Fresh issue: The company issues new shares and receives the proceeds. Investors should look at the stated use of those funds and whether it fits the company’s plans.
- Offer for sale: Existing shareholders sell shares, and the proceeds go to those sellers rather than to the company. The company may still become publicly listed, but the OFS itself does not raise new capital for its operations.
- Mixed offer: A portion of the offer may raise capital for the company while another portion provides liquidity to selling shareholders.
Garg says existing private-equity (PE) investors may sell because they need an exit and want to redeploy capital elsewhere. He also describes promoters’ reasons as potentially involving succession, governance changes, or a transition to professional management while the family retains ownership. Those explanations are possible motives, not proof that a particular sale is beneficial or that the company is a good investment. To assess an offer, separate the issuer’s stated funding purpose from each selling shareholder’s reasons and the amount each will sell.
Who has the most influence on IPO pricing?
Garg says domestic investors now have a larger say in IPO pricing than they did previously. He also says large investors may have negotiating leverage in very large issues. These are his assessments of market influence, not a universal formula for how every IPO price is set.
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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchIPO pricing is an estimate, not a precise prediction of the share’s value after listing. As Garg puts it, “IPOs can never be priced exactly.” For a reader evaluating an offer, that uncertainty makes the disclosed valuation and business fundamentals more useful than a single headline price. Consider the issuer’s financial strength and prospects, compare its valuation with relevant listed businesses, and check whether the offer’s price depends on assumptions the company may struggle to meet.
How much does the grey market influence IPO pricing?
Garg says grey-market activity can influence investor behaviour, but he does not present it as proof that an IPO is fairly valued or will list at a gain. He distinguishes that attention from institutional participation, which he says is based on investors’ own analysis. Oversubscription and grey-market interest describe demand or sentiment; neither establishes what a share is worth or what its later market price will be.
Keep the measures separate when comparing an IPO with its outcome: subscription levels are not post-listing returns, and a grey-market indication is not the exchange-traded share price. The interview does not provide a complete issuer-by-issuer dataset that would support a general estimate of the grey market’s predictive accuracy.
What do Garg’s fund-flow estimates say—and not say?
In the October 13, 2026 interview, Garg estimated that mutual funds had roughly ₹30,000–40,000 crore per month, or around ₹4–5 lakh crore per year, to deploy. He said IPOs could absorb ₹1.5–1.8 lakh crore, with the balance going to qualified institutional placements (QIPs) and the secondary market. These are Garg’s interview estimates, not independently verified or current totals; they should not be treated as a forecast for any individual issue.
Garg says the growth of domestic capital may make Indian markets less dependent on foreign portfolio flows. He does not say that this eliminates the possibility of a sharp correction: when asked whether a fall of more than 20% was ruled out, his answer was, “Can’t say.”
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to assess an IPO before applying
Before deciding whether to apply, examine the offer on its own terms rather than treating enthusiasm, an exit or a past listing gain as a verdict. SEBI’s Investor Education Reading Material includes a presentation titled “How to invest in Initial Public Offer.” Its Financial Education Booklet recommends researching a company’s background, future prospects and financial strength, and describes applying through a broker or intermediary with a UPI mandate that blocks funds pending allotment.
- Read the offer details. Identify how much is a fresh issue and how much is an OFS. Check the stated use of fresh proceeds and which shareholders are selling.
- Assess the company. Review its background, prospects and financial strength, including the business risks and the assumptions behind its plans.
- Put the valuation in context. Compare the offer’s valuation with relevant listed companies and the issuer’s disclosed fundamentals. A popular issue is not automatically a reasonably priced one.
- Separate demand signals from investment evidence. Subscription and grey-market attention may indicate interest, but they do not establish fair value or future returns.
- Understand the application mechanics. SEBI’s booklet describes an application through a broker or intermediary and a UPI mandate that blocks the funds while allotment is pending. Check the current instructions provided by your intermediary before submitting an application.
Ultimately, the case for an IPO depends on the company, its price and the investor’s willingness to accept risk and wait for execution. Garg’s broader point is that a market can finance uncertain businesses without every IPO making money immediately; that point does not remove the need to assess each offer carefully.
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