Due to the boom in the primary market, companies raised more than Rs 17000 crore through the IPO this year, but after the listing, all of these shares are seen to be airing and almost half of these new listings trade below their issue price. Is seen
The second wave of Covid-19 and the huge fall in the stock market due to this has also dented the spirit of the primary market. The Nifty has lost nearly 6% from its February high of 15,431, but is still up 4% this year.
Out of the 17 IPOs recently listed, 8 are giving negative returns. At the same time, double digit growth is being seen in 7 of them. We have included only those companies in this analysis whose issue size was more than Rs 100 crore.
Companies operating below their issue price include Anupam Rasayan, Easy Trip Planners, Home First Finance, Craftsman Automation, Suryoday Small Finance, IRFC and Kalyan Jewelers.
The 7 companies that have given double digit growth returns after listing include MTAR Technologies, Indigo Paints, Nazara Technologies, Laxmi Organic, Barbeque Nation, Stone Kraft and Railtel Corporation.
Experts believe that this weakness was due to high valuations, increase in cases of Covid-19, weakness in Dalal Street’s sentiment and profit-booking. Experts also say that if the results of these companies remain strong then it can once again come on the radar of buyers.
Experts are of the opinion that the approach of investing in an IPO should be different from the perspective of investing in the secondary market.
Mohit Corporation of Hem Security Says that we will have to wait for a quarter to see a clear indication of the condition and direction of these stocks. We are not advised to take any position on companies related to jewelery and travel as these will have a direct impact on the position of Covid-19.
in such a way Nirali Shah of Samco Securities Told Moneycontrol that 50 per cent of the IPOs in 2021 had people investing money only for listing gains. The fundamentals of these stocks were not very strong. These stocks do not appear to be strong enough to meet the challenges of the corona epidemic. Apart from this, the valuation of some IPOs was very high. Due to which there was a further decline in them.
Investors are advised to invest in an IPO only by doing a thorough research keeping in mind their risk appetite, liquidity needs. However, some of the good quality listings in 2021 can be invested on declines.
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