FPIs Drawn to IPOs but Turn Their Backs on Secondary Markets

Foreign Portfolio Investors (FPIs) are increasingly captivated by the allure of Initial Public Offerings (IPOs), even as they retreat from secondary markets. This shift highlights a strategic pivot towards high-growth opportunities in fresh listings. IPOs, often seen as gateways to emerging industries, are attracting FPIs with their growth potential and attractive valuations.

Meanwhile, secondary markets face challenges such as global economic uncertainty, fluctuating policy landscapes, and limited compelling opportunities. Market analysts warn that the declining FPI interest in secondary markets may affect liquidity and investor confidence, creating ripples across the broader financial ecosystem.

This divergence underscores FPIs' cautious yet opportunistic approach, emphasizing fresh opportunities over established equities. As the IPO pipeline remains robust, this trend is expected to continue, reshaping India's market dynamics in the near term.

Source: ET Prime