‘IPO flipping in the Gujju genes,’ Zerodha CEO Nithin Kamath lauds Gujarat’s investor participation

Zerodha co-founder has praised Gujarat for having the highest initial public offering (IPO) participation, around 40 per cent, with investor participation of 9 per cent.

In a post on X, he cited a study by the market regulator Sebi on investor participation in IPOs.

“Gujarat accounts for about 9% of the total investor customer base, but they account for 40% of IPO participation in both retail and HNI categories.

IPO flipping (trading) in the Gujju genes,” he wrote on X.

According to the Sebi report, Gujarat had the highest number of retail investors, 39.3 per cent, followed by Maharashtra, 13.5 per cent, and Rajasthan, 10.5 per cent.

Regarding initial public offering participation, the report observed that 70 per cent of IPO investors were from the top four states: Gujarat, Maharashtra, Rajasthan and Uttar Pradesh.

The non-institutional investors (NII) from Gujarat received about 42.3 per cent of the total allotment in the NII Category, followed by Maharashtra with 20.4 per cent and Rajasthan with 15.5 per cent.

According to the report, the overall IPO market activities were buoyant from FY22 to FY24 due to higher retail participation, as seen in a number of applications and oversubscriptions.

“The success of the IPOs was partly supported by overall positive market sentiments and was further boosted by strong post listing performance in some of the IPOs,” it said.

Out of the 144 IPOs listed between April 2021 and December 2023, 75 per cent gave positive returns. Almost 92 IPOs were oversubscribed by more than ten times, and only 2 IPOs were undersubscribed.

Additionally, the report stated that increased demat accounts also drove a rise in public issues after the COVID-19 pandemic. Almost half of the demat accounts that applied for IPOs during this period were started during the post-COVID period.

After the Reserve Bank of India’s guidelines on IPO financing by NBFCs, Sebi stated that the over-subscription rate in the NII category declined 17 times from 38 times.