A bull run in the stock market brings with it the usual hangers-on. This time too, it’s no different. A spate of initial public offers (IPOs) has flooded the Indian stock market since the middle of 2020 when the bulls, driven by liquidity, started charging at breakneck speed.

Close to 50 IPOs have hit the market over the past year—eight of them in just the past fortnight or so. Many more are coming, and the market can’t seem to get enough. Most IPOs are being oversubscribed many times over and across investor categories. The eye-popping gains on listing day that result from this exuberance are feeding a virtuous cycle. Among high-networth individuals, the oversubscription, on average, has been close to 200X over the past year or so, according to markets data provider Prime Database.

Despite a quarter of the year still to come, 2021 has already cemented its place as one of the most prolific years in the history of the Indian markets—both in terms of number of listings and money raised. Next year may be even better, with Life Insurance Corporation of India (LIC)—the country’s oldest and largest insurer— set to go public set to go public The Ken Why India shouldn’t repeat IRCTC’s valuation misstep with LIC’s IPO Read more . The mother of all IPOs, LIC is expecting to raise upwards of Rs 1,00,000 crore (US$13.5 billion) through its listing, which is expected early next year. Advance that by a few months, and 2021 will be hard to beat for a very long time.

But even as IPOs become more and more common, they’ve grown increasingly different from what we’ve come to expect in the past. We parsed through the mainboard IPO data provided by Prime Database for companies that listed between 2016 and 12 August 2021 to identify how things are changing, why, and what this means going forward.

Among the new trends, many companies with little or even no ‘promoter’ shareholding are lining up to go public. That’s a break from the past, when promoters usually held pride of place in the shareholding tables. Joining the IPO queue are loss-making companies, with more of these than ever before gearing up to test the appetite of public markets. Think, for example, startups like foodtech major Zomato, which upended traditional valuation metrics with its stellar listing stellar listing The Ken Has Zomato set new benchmarks for internet companies to beat? Read more .

These big changes have big implications.

Of IPOs and red herrings

Fittingly for an analysis of IPOs, there are red herrings. For instance, IPOs often have a higher share of fundraising from offers-for-sale (OFS)—the sale of shares by existing shareholders—than from fresh issues of shares.