InvestorQ : What is driving this sudden interest in Indian IPOs and do you see this trend sustaining in the coming months too?
Ria Jain made post

What is driving this sudden interest in Indian IPOs and do you see this trend sustaining in the coming months too?

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1 month ago
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There are a number of reasons for the upsurge in IPOs in the last few months. But, if you were to describe the phenomenon in just one word, it would the availability of good quality paper at a good price and that making difference. Here is what you need to know.

· One reason is performance of recent IPOs. If you look at IPOs in 2019, the numbers are much lower. What really stands out is that a majority of these IPOs performed very strongly post listing.

· If you look at the last five years, IPOs have generally done well barring a few exceptions. For example, the grossly overpriced PSU insurance IPOs have done awfully post listing with most of them losing more than 80% of their market value.

· It has been observed that successful IPOs managed to position in emerging growth sectors like technology, digital enablement, pharma, APIs, specialty chemicals, insurance and more such industries.

· Another factor driving IPOs is the post listing performance in recent times. Most stocks like IRCTC, SBI Cards, Rossari Biotech and Happiest Minds have done extremely well post listing which has added to the aura of IPOs in India. When IPOs are priced conservatively, they leave something on the table.

· One interesting, but rather weird reason is investor ennui. This is about investors getting bored by the same stocks outperforming again and again and are looking for some variety by investing in IPOs.

· Let us not forget that NSDL and CDSL reported a surge in opening of fresh DP accounts to the tune of 55 lakhs. While this was partly due to, it is also due to secondary market ennui that is creeping into the markets.

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