IPO gives listing gains only when its Bull Market

Lessons from Mr Market
#1

We all are seeing that since March Mid and also in April market is sluggish or has gone sideways and rolling between 14000 to 15000.

But the point to be noted here is - IPOs are not performing well in such kind of markets for Investors as it gets listed at a discounted price. But when the market was in a good mood shooting highs IPOs were performing quite well (in terms of listing gains for investors).

But due to oversubscription, IPOs are performing well for companies as they are selling their shares at a premium price.

Well, this is my observation.

Did you notice anything else regarding IPOs?

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#3

Yeah, You are right Krishna I have shifted my comment to this topic.

#4

Valuations for the offerings have started to be in the higher end.
IPOs till Jan were clearly leaving out some margin of safety for the IPO investors. Recent offerings are pricing it to normal valuations, not leaving much on the table for an IPO investors.

This I believe is in correlation with the market, as valuations in the market get stretched, so do the IPO pricing as promoters want to squeeze as much as possible from their dilution.

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