Exit Opportunity
IPOs becoming exit tool for early investors than long-term fund source
This story was originally published at 15:20 IST on 17 November 2025
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MUMBAI – Initial public offerings have increasingly become exit vehicles for early investors rather than mechanisms for raising long-term capital, Chief Economic Advisor to the government V. Anantha Nageswaran said at the Financing Summit organised by the Confederation of Indian Industry in Mumbai. This undermines the spirit of public markets, he added.
According to Nageswaran, a deep and reliable bond market is a strategic necessity, particularly for financing long-term national objectives as India cannot depend predominantly on bank credit for long-horizon financing. "Insurance and pension funds whose horizon naturally align with long-term investments must play a larger role. However, the edifice of the bond market will be built on the foundations of trust and transparency to which corporate leadership must commit on a durable and demonstrable basis," Nageswaran said.
Nageswaran also said if capital flows continue to drift along geopolitical fault lines, external financing alone will be insufficient to meet the scale of India's development ambitions. If India is to fulfill its aspirations, the primary drivers of financing must increasingly come from within, he added.
Nageswaran outlined four key priority areas for India to sustain its growth trajectory--industrial upgrading, harnessing demographic dividend, energy self-sufficiency, and deepening innovation capacity.
According to Nageswaran, to meet these four objectives, the financial sector carries far greater responsibility than other sectors. "Business as usual financing will not suffice in an era defined by uncertainty and technological discontinuities. How we lend, how we assess risk, and how capital markets allocate value, all must evolve," Nageswaran said. End
Reported by Shakshi Jain and Anand JC
Edited by Akul Nishant Akhoury
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