IPOs under scrutiny: Is the IPO market becoming an exit route for promoters?
The Indian equity market is once again witnessing concerns about the intent behind some public issues. CMR Green Technologies Ltd., which filed its draft red herring prospectus (DRHP) due in September 2025, has drawn attention for reasons beyond business fundamentals.
A careful reading of the DRHP reveals that despite the company's substantial losses over the past few years, the IPO will not benefit the company. Instead, the entire issue is structured as an offer for sale (OFS), allowing promoter group entities and existing investors to exit by selling their shares to the public. This raises a fundamental question: is the IPO route increasingly being used as a liquidity event for insiders rather than a way to raise capital for business growth?
