After a great IPO season, now new IPOs are coming but they are not getting much traction.
Due to the global slowdown in economic growth and inflation situation now new most of the IPOs are getting listed either at discount or at a 5-10% premium.
Most new-age companies listed last year given high listing gains but eventually became the greatest wealth destroyers.
Below are the companies which are down by 40% or more below their issue price
|
Company Name |
Profit/Loss |
|
One 97 Communications Limited |
-71% |
|
Suryoday Small Finance Bank Ltd |
-67% |
|
CarTrade Tech Limited |
-62% |
|
Fino Payments Bank Limited |
-58% |
|
Windlas Biotech Limited |
-51% |
|
Nuvoco Vistas Corporation Ltd |
-47% |
|
Shriram Properties Limited |
-46% |
|
Krsnaa Diagnostics Limited |
-45% |
|
Glenmark Life Sciences Limited |
-41% |
|
Aditya Birla Sun Life AMC Ltd |
-41% |
A study says newly listed companies are available at a reasonable price within 2-3 years of listing.
In 2022 how well IPOs performed?
|
Company Name |
Listing Day Gain |
Profit/Loss |
|
Prudent Corporate Advisory Services Limited |
-11% |
-19% |
|
Life Insurance Corporation of India (LIC) |
-8% |
-13% |
|
Rainbow Children's Medicare Limited |
-17% |
-9% |
|
AGS Transact Technologies Ltd |
-8% |
-47% |
IPOs will perform well on listing days when the market is bullish and investors are optimistic about the market.
For IPO the valuation is made ignoring the company’s fundamentals and based on a STORY about how the company will prosper in the future.
But post listing market will show how important the fundamentals are.
When fear/other factors impact the market the investors gets panic due to this grey market premium also going downwards and the market also goes bearish.
Especially when Paytm got listed the dark side of the IPOs has been seen, after that most of the company's IPOs got stalled or listed at a marginal premium.
Now retail investors are staying away from the IPOs as most of them are investing in IPO only for listing day gains. Due to this low retail participation and social media traction will get reduced automatically premium will not be seen in the issue price.
You witnessed that due to Paytm disastrous listing OYO has postponed listing decisions many times and also reduced its IPO size.
How you are changing investment decisions in an ongoing bearish market and inflation situation?
No comments:
Post a Comment