Veteran investor Sandip Sabharwal has sounded a cautionary note about the ongoing boom in initial public offerings (IPOs) in India, suggesting that the excitement may mask deeper risks. He warned that while the primary market remains vibrant, the underlying quality and transparency of many new listings are cause for concern.
Sabharwal pointed out several red flags, including companies showing profitability only just before listing, substantial promoter share sales, and heavy institutional participation despite weak secondary‑market performance. He emphasised that these patterns indicate the primary market may be overheating while broader investor sentiment remains subdued.
His remarks come at a time when the Indian markets are grappling with stretched valuations, heavy foreign fund outflows and selective sectoral weakness, making IPOs a focal point for both opportunity and caution.
For investors, Sabharwal’s message is clear: enthusiasm for new listings must be balanced with deeper scrutiny of fundamentals, governance and disclosure standards.
