With the IPO market growing sharply in India, investment strategy seems to be changing. The earlier strategy of getting the maximum from listing gains, that is, selling shares allocated in an IPO on the day of listing, is now taking a back seat.

Of the 86 companies, which got listed in 2007 via the IPO route, only 16 companies are now trading in negative terrain compared with their listing price.

The other companies, posting positive returns, did show some discrepancies while fetching returns on the day of listing but are fetching returns till date, which denotes that the market is maturing and does not just rely on the short-listing day gains.

Earlier, companies provided listing gains in the range of 50-30% and investors could exit early. In fact, experts note that after such impressive gains, stock price would fall down to abysmal levels, after a month. The trend has changed. For instance, Orbit Corporation, which gained 16.32% on the day of listing, is now giving a return of 675.5 % as compared with its listing price of Rs 110. Other companies, which are in the league, include Everonn Systems India, MIC Electronics and Pyramid Saimira Theater.

This clearly proves that investors who sold their allotted lot of shares in the above companies on the day of listing are on the losing side and a little patience would have fetched them good returns.

However, some companies, which were listed with premiums, are actually providing negative returns as compared with the day of listing. Cambridge technology Enterprises, which got listed with a premium of 163% on February 7, reduced its gain to 120.26%.

The same happened with companies like SEL Manufacturing Company, Pochiraju industries limited, Lumax Auto Technologies, MindTree Consulting and Roman Tarmant.

Experts believe that investors who sell shares on the listing day are investors who have borrowed money from banks so it makes sense for them to sell shares and book whatever profit they get, after discounting the interest they pay back to the banks.

According to Gaurang Mehta of Enam Securities, ?There are different categories of investors who do a flip-flop of shares on the day of listing but a majority of them belong to the retail segment. In the secondary markets, the fundamentals of the company do play a major role in deciding the exact valuation.?

He added, ?In view of the rally that we have witnessed in the stock markets in the last one year the current trend can be justified.?