Business

Retail investors’ rush for IPOs only for listing day windfall?

By Dan Neff

The optimism at the time of listing doesn’t always translate into reality after a period of time for many companies, hence the eagerness to exit on debut.

Synopsis

That isn’t surprising. More than half of all IPOs in the last two years did better on listing day compared with returns over a year, analysts said. Short-term retail investors who exit on the first day have been rewarded with big gains if the new listing has enough of a buzz.

Mumbai: A majority of retail investors in initial public offerings (IPOs) are only in it for the listing pop, an ET analysis shows — they offload shares allotted to them on the debut day. The number of retail investors in newly-listed companies drops sharply soon after they open for trade.

That isn’t surprising. More than half of all IPOs in the last two years did better on listing day compared with returns over a year, analysts said.

ET Bureau

3 mins read, Last Updated:

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Dan Neff