Saturday, March 2, 2019

Taking Stock of IPO:

When the going is good, everything gets going. In stock market terms it is called as sentiment. And sentiment is crucial for success of issues like Initial public offer. Majority of IPO's come when market is in good mood or the sentiment is positive.

And when the sentiment is positive, there is a feeling of goodness in the air and there is often mad rush for Share IPOs etc. Taking advantage of this, these share promoters quote a hefty premium which again gets bought for the simple reason - The Sentiment is GOOD.

And the worst part is these issues get oversubscribed by many folds, due to which these investors should be lucky to get an allotment. And on the listing day most of these stocks get listed at a huge premium.

But when sentiment turns bad, many of these premiums evaporate and some of them start quoting below their listing price if not their allotment price. The mad rush has ended and many of these 'darling' stocks are trading in the market without getting noticed. Literally they become out of flavour. And Some of these companies come up with some stock split or bonus - thereby effectively confusing the investor on the fall in stock price.

Genuinely speaking, Investors who found some of these IPO stocks and their businesses sensible, need to wait for the cycle to turn over and then pick these stocks at a fraction of their cost.

Below mentioned is list ofsuch IPO stocks. Kindly do your due diligence before investing.



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