No: an IPO does not have to produce an immediate gain to serve a purpose. In a Moneycontrol interview published Oct. 13, 2026, Equirus founder Ajay Garg argues that public equity can fund businesses with uncertain outcomes, even though some investors may lose money and some listings may trade below their offer price. That is a view about how a healthy market should work—not a promise that any particular IPO is fairly priced or will recover.
Does every IPO have to make money?
No. A listing-day gain is one possible outcome, not the definition of an IPO’s success. Garg’s case is that equity investors accept business risk and should give companies time to execute rather than expect every new listing to rise immediately. A market that finances companies with uncertain prospects may have losing investments alongside a smaller number of businesses that deliver unusually strong returns.
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That argument has two different scorecards. For a company, an IPO may provide capital for its operations and growth. For an investor, the relevant question is whether the shares’ eventual value and any distributions justify the price and risk. A company can raise money successfully even if its stock later falls; a first-day pop does not by itself show that the business is sound or that the offer was attractively priced.
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Garg told Moneycontrol: “Equity investing is about underwriting risk and giving businesses time to execute, not expecting every IPO to deliver immediate returns.” He also said, “A healthy IPO market must be willing to finance businesses with uncertain outcomes, accepting that some companies may fail while a few generate outsized returns.” These are his market views, not empirical guarantees or individual investment advice.
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What money does an IPO raise—and who receives it?
An IPO can combine a fresh issue, an offer for sale (OFS), or both. In a fresh issue, the company issues new shares and receives the proceeds, subject to the purposes disclosed in its offer documents. In an OFS, existing shareholders sell some of their shares and receive the sale proceeds; the company does not receive that portion as new capital. The distinction matters when assessing claims about how an IPO will fund expansion.
- Fresh issue: examine the company’s stated use of proceeds and whether it aligns with its plans and financial position.
- OFS: identify which shareholders are selling, how much they are selling and what stake they will retain, if any.
- Mixed issue: separate the two portions rather than treating the total offer size as money going to the business.
Garg says existing private-equity (PE) investors may sell because they need liquidity to redeploy capital elsewhere. He also describes promoter sales as potentially connected to succession planning, governance changes or a move toward professional management, sometimes while a family retains ownership. Those are possible rationales, not proof that a particular sale benefits the company or that an IPO is properly valued. The issuer’s stated purpose and each seller’s reason should be assessed separately.
Who has the most influence on IPO pricing?
Garg says domestic investors now have a larger say in pricing than they did previously, and that large investors can have negotiating leverage in very large issues. These are his assessments of India’s market, not a claim that one investor group sets every offer price. The book-building process brings bids from different investor categories together, while the issuer and its advisers determine the offer terms within the applicable process.
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In Garg’s words, “IPOs can never be priced exactly.” That is a reminder that an offer price is an estimate of value under uncertainty, not a guarantee of the price at which shares will trade once listing begins. To assess whether the terms look reasonable, compare the proposed valuation with disclosed financials and relevant listed businesses, and consider the company’s prospects and risks. Demand figures should be read as evidence of applications at the stated terms, not as a verdict on value or future returns.
How much does the grey market influence IPO pricing?
Garg says grey-market activity can influence investor behaviour, but it is not proof that an IPO is fairly priced or will deliver a gain. In his account, institutional investors participate on the basis of their own analysis. A grey-market indication is not the same as an exchange-traded price, and oversubscription reports describe demand relative to shares offered—not what a share will be worth after listing.
Keep these signals distinct: subscription levels show how many applications were made in relation to available shares; grey-market chatter reflects informal expectations; and the post-listing market price reflects transactions on the exchange after trading starts. None on its own establishes the company’s long-term value.
What Garg’s 2026 figures do—and do not—show
In the Oct. 13, 2026 Moneycontrol 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 his interview estimates, not independently verified current totals or a forecast of how much capital will flow into future IPOs.
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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallMoneycontrol also reported that seven mainboard IPOs were associated with Equirus over the prior year. Excluding NSE, it said the other six were trading above their issue prices at the time of publication: Omnitech Engineering was up around 200%, while CMR Green Technologies, described as the weakest performer among those six, was up around 11%. Those are dated market observations from the interview article, not current returns, a complete IPO-market dataset or evidence that future issues will perform similarly. The interview does not establish whether these outcomes are representative of all IPOs.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to assess an IPO without relying on a listing-day prediction
- Read the offer documents. Establish what the company does, its financial position, risks, plans and stated use of proceeds. SEBI’s investor education materials include an IPO presentation and a financial education booklet that recommends examining a company’s background, future prospects and financial strength: SEBI Investor education materials and the Financial Education Booklet.
- Separate company funding from shareholder selling. Determine how much of the offer is fresh issue and how much is OFS, then identify the sellers and the company’s intended use of any fresh proceeds.
- Judge price against fundamentals. Consider the valuation relative to the company’s disclosed financials, risks, prospects and relevant listed peers. A popular issue is not necessarily a cheap one.
- Distinguish demand from returns. Treat subscription levels and grey-market indications as limited signals. Neither assures allotment, a listing gain or long-term performance.
- Understand the application and blocked funds. SEBI’s booklet describes applying through a broker or intermediary and using a UPI mandate to block funds pending allotment. Follow the current instructions provided by the participating intermediary and your bank or UPI app; do not treat blocked funds as money already paid for shares.
The interview does not say that a market correction is impossible. Asked whether a fall of more than 20% could be ruled out, Garg answered, “Can’t say.” He argues that growing domestic capital may reduce reliance on foreign portfolio flows, but that does not remove market risk.
Sources and context
The market commentary and attributed estimates above come from Moneycontrol’s interview with Ajay Garg, published Oct. 13, 2026. Investor-education references are from SEBI Investor and its Financial Education Booklet.
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