Zerodha’s Kamath talks about Ola Electric and FirstCry IPOs

Zerodha Co-Founder and CEO Nithin Kamath in a recent post on unknown (before Twitter), congratulated Electric WaveUnicommerce and First Cry in their successful list.

“Congratulations to Ola Electric, Unicommerce and First Cry on the listing. Based on the listing, it seems that investors are happy,” Kamath wrote.

Congratulations to Ola Electric, Unicommerce and First Cry for the listing. Based on the listing, it seems that investors are happy 😉
If our markets are to grow, we need more local companies to go public and also leave something on the table for IPO investors.
IPOs that work well are…

— Nithin Kamath (@Nithin0dha) August 13, 2024

He stressed the importance of more local companies going public to ensure market growth and provide opportunities for IPO investors.

Kamath noted that successful IPOs not only encourage more companies to consider going public, but also attract retail and institutional investors.

“If our markets are to grow, we need more local companies to go public and also leave something on the table for IPO investors,” he said.

Kamath highlights the need for more IPOs

He also highlighted the need for more IPOespecially in light of the concerns raised by Anantha Narayan, WTM at SEBI, regarding the current supply of new securities.

Kamath noted that this issue is becoming increasingly important as domestic capital flows continue to increase.

“We also need more IPOs because, as SEBI’s chief operating officer Ananth Narayan recently pointed out, we seem to have a problem with the supply of new securities. This problem is occurring at a time when domestic flows are increasing,” Kamath added.

Increase in newly listed companies

According to a SEBI ReportIn 2024, the number of new companies listed on the stock exchange increased to 272, compared to 164 in the previous year. This period also saw a record number of small and medium-sized companies going public.

Parent company IPOs nearly doubled to 76 in 2023-24, with an average issue size of Rs 597 crore, slightly down from Rs 635 crore in 2022-23.

Reaction of Internet users

The post was first shared on August 13 and has since garnered over 100,000 views.

While many people took to the comments section to share their opinions, some users asked about By Zerodha IPO, with one saying: “Lead by example, my friend. Check it out, Zerodha.”

Zerodha listing when

— Stocktwits India 🇮🇳 (@StocktwitsIndia) August 13, 2024

Go global, do an IPO!
Let’s do it.

— Atul Mehra | Enterprise AI (@MehraAtul123) August 13, 2024

“We have serious supply problems, more and more companies need to go public to meet the huge demand. If supply remains subdued, valuations will skyrocket, which will hurt the long-term health of the market,” wrote one user.

“But we are in an IPO boom over the last two years like never before. But as always, there are a lot of dubious IPOs if the stock only goes up for 3 months and then crashes or stagnates,” another added.

Kamath’s take on Zerodha’s IPO

Nithin Kamath shared his views on Zerodha’s IPO in a post on the site tradingqna.com forum.

“The philosophy that we work with, um… I think IPO doesn’t work. Setting revenue targets and going after them, etc. But that being said, not doing an IPO makes us look like hypocrites when we ask everyone else to do it,” he said.

Kamath said the team is focused on building businesses like Zerodha Capital, Zerodha Asset Management and more.

“Maybe in the future when all of them can add revenues significantly, maybe then. Brokerage just has zero predictability and a lot of regulatory risks. We don’t want to even think about an IPO unless there is predictability in terms of revenues,” he added.