IPO not a surrogate for financing

Bengaluru: Padma Vibhushan awardee and Founder of Infosys N R Narayana Murthy on Friday said IPOs have been taken as a "surrogate" for new rounds of financing by entrepreneurs, and this approach is not a good thing.

The co-founder of IT major Infosys was speaking at the 'India Global Innovation Connect', a global conference on startups.

"IPOs have somehow been taken as a surrogate for the next round of financing. I think that's not a good thing, because an IPO comes with tremendous responsibility," Murthy said.

Speaking about the discussion he and another co-founder of Infosys had before going for the IT major's Initial Public Offering (IPO), he said, "IPO brings onerous responsibility as so many people with very little money would put faith in us and put in their meagre disposable income, it is important to give them a suitable return."

The event was organised by Smadja & Smadja, a Switzerland-based strategic advisory firm, in partnership with Karnataka Digital Economy Mission (KDEM), Catamaran Ventures and Tata Digital.

Murthy is the Founder and Chairman of Catamaran Ventures.

Pointing out that in India we have not done a good job of estimating the market size, he said.