New Delhi, Dec. 2 -- Only around 25% of the equity raised through initial public offerings (IPOs) is allocated for capital expenditure, while the majority of funds are utilized to repay debt, invest in subsidiaries, and reduce working capital borrowings, according to a research paper by Bank of Baroda (BoB) chief economist Madan Sabnavis.

According to the report, among the fresh equity raised, 26% was designated for capex, 29% for debt repayment, 9% for subsidiary investments, and 6.2% for working capital. The report indicated that the allocation for 24.5% of the funds was not specified. The 189 IPOs encompass companies that have accessed the equity market this fiscal year or have submitted draft red herring prospectuses.

A noteworthy p...