February 24, 2024

IPO News

High IPOs Prevent Investors to Move With Confidence

41 IPOs that seek the primary markets to raise funds or the ones beyond 1000 crores in size have traded far below their listing prices. 18 of them have traded below the issue prices. Out of the 41, 12 IPOs are down by approximately 50 to 65% from their highest level, proving that it will be challenging for investors in the current market turmoil.

PB Fintech is at the top of the loser’s list and clocked for 67 percent fall from 1,470 rupees per ACE equity. Following this firm, One97Communications, the parent of Paytm, went down by 66.5 percent from 1,961.05 rupees. The most interesting fact is that IPO investors experience a loss of 69% when the stock hasn’t gone beyond the issue price.

Most companies start with great listings but cannot offer anything to their investors towards the end. Usually, IPOs price themselves high initially to get launched in a peak position in the market. After some time, their outlook diminishes as the euphoric mood fizzles out. Fino Payments Bank, CarTrade Tech, and Zomato have lost 60%, 61.3%, and 65.8%.

The NSE values are Indigo Paints at -0.29%, Glenmark at 0.72%, Krsnaa Diagnostics at 0.18%, Lifesciences at 1.48%, Medplus Health at 0.72%, Chemplast Sanmar at 1.48%, and Nykaa 0.72%. These are the ones that trade with deeper cuts beyond 50%. VK Vijayakumar, the Chief Investment Strategist of Geojit Financial Services, which has NSE -0.92%, stated that the market condition is unfavorable for large IPOs as the space is a mixed bag.

Investors are particular about taking the right path to make profits and focus on growth despite the rising rates of interest, ECB and Fed’s QE tapering, and the impact of the Ukraine war in Europe. These global macro factors affect liquidity. The OFS component being high in most IPOs, is failing to inspire investors and give them confidence while investing.

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