Valuable lessons in IPO investing from the fiscal year just gone by
- Over 60% of the IPOs are trading below the listing price and around 40% are trading even below their issue price, thereby depleting the wealth of investors, particularly retail investors.
Markets ended FY22 on a positive note and this week fear gauge indicator India VIX eased. Primary markets appear to be bustling again as D-street finds stability. While FY22 was a record year for IPOs, the pace is anticipated to persist in FY23 as well. Thanks to the booming bull market, 74% of the IPOs that struck D-Street in the fiscal that concluded gave excellent listing returns which ranged up to 270%. Having said that, the true beneficiaries of this IPO mania were the PE/VC investors, who managed to cash out a stunning Rs. 827 billion from the Indian primary markets, more than times times of what they pocketed in FY21.
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