Mumbai . A record number of IPOs came in the stock market in the year 2021. Investors also made a lot of money from these IPOs. But gradually after a few months, most of these newly listed IPOs have now become a headache for the investors. Many of these have gone below their issue price. Due to which billions of dollars of investors have been sunk.
However, even when these IPOs came, all the market experts were worried about their expensive valuations. Despite this, many of these got a bumper listing. Despite this, all the experts were constantly alerting the investors.
Valuation big issue
Aditya Kondawar of JST Investments says that all the recently listed IPOs have been hit hard. There have been many reasons for this. The first reason for this is that due to rising inflation, all the central banks are now ready to increase the interest rates. Apart from this, the Russia-Ukraine crisis has worked as a scab on leprosy. Along with this, the valuation of the recently listed IPO looked very expensive from the investment point of view.
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Experts say that due to the increase in interest rates by the US Fed and the crisis caused by the Russo-Ukraine war, the flow of dollars in emerging markets has stopped. The fall in the valuation of Indian IPOs is a clear indication that the air of inflation due to heavy inflow of dollars in the market has been blown away.
Significantly, the shares of 63 companies listed in 2021 have seen a fall of 34 to 54 percent and they have gone below their issue price in the recent fall. All the IPO stocks that appeared in the negative territory were IT-based new-age trading stocks. At the time of IPO, their valuation was very expensive. Apart from this, there has also been a significant decline in IPOs related to jewellery, retail, dairy, diagnostics, cement, health insurance and real estate. In this, many companies are running below their issue price.
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Avoid buying cheap
Deepak Jasani of HDFC Securities says that investors should not get too excited at this time and buy fresh in these stocks just on the basis that they are getting much below their recent highs at the moment. Although the possibility of bounceback cannot be ruled out but we also cannot say how many of these shares will be available for sale at the end of the lock-in period.
Money should be invested in installments intermittently
If investors like the business model of a company and they hope that soon this company can come in profit, then after doing good research in these stocks, they should invest money in installments intermittently and at the same time they should invest money from these shares. One should keep a close watch on the upcoming news related.
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