The IPO market game is getting complex with rising investor interest and then exiting early. A recent study by SEBI revealed that around 54% of the IPO shares in terms of value were sold by investors (excluding anchor investors) in the first week of listing on the stock exchange. The study considered the 144 IPOs listed between April 2021 and December 2023.
Different Investor’s Moods on IPOs in the First Week
Individual investors sold 50.2% of shares in terms of values in the very first week of listing, while 70% got sold within a year.
- Retail investors sold 42.7% of shares by value and NIIs (Non Institutional Investors) sold 63.3% of shares in terms of value in the first week.
- Mutual funds sold about 3.3% and banks sold 79.8% of allotted shares.
How Did Investors Make Up Their Mind?
The investors sell the shares that are listed at higher pricing and they hold the ones that are listed at lower prices. Out of the 144 IPOs listed between April 2021 and December 2023, 108 IPOs have generated positive returns while 26 IPOs have given more than 50% returns on the listing day.
If an IPO has generated a return of more than 20%, then individual investors sold 67.6% of the shares by value within a week. When returns are negative, then individual investors sell 23.3% of shares by value.
Think about your IPO investments and did you also say “bye” to them?
References:-
https://www.sebi.gov.in/media-and-notifications/press-releases/sep-2024/sebi-study-shows-54-of-ipo-shares-allotted-to-investors-excluding-anchor-investors-are-sold-within-a-week_86387.html
https://www.sebi.gov.in/reports-and-statistics/research/sep-2024/study-analysis-of-investor-behavior-in-initial-public-offerings-ipos-_86385.html
