After listing, majority of momentum IPOs trading below issue price
to raise an aggregate of Rs 5,681 crore over the next week.
Some experts say that IPO is a bull market product and issuers only come to raise funds when the market is on a rise and so investors should be extra careful while picking up an issue. A due diligence of the company and its pricing is very important.
“Investors need to be far more careful while investing in IPOs because there is no track record and experience in such companies. Also the peer comparison should be done with companies of similar market capitalisations,” said a top official with an investment bank.
Others agree. “Companies coming out with IPOs are not giving shares at par or at book value and so investors need to evaluate them like they do before investing in any stock in the secondary market. Equal caution should be practised in any equity investment,” said Dinesh Thakkar, CMD, Angel Broking.
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