In the first four months of the calendar year 2019, out of the 7 major companies that made their way to the Indian bourses six are trading at a price higher than their listing price. From the major IPO listing, the year till date has been witness to total fundraising of as much as Rs. 9,591.71 crore in comparison to Rs. 18,435.66 crore mopped up during the same period a year ago.
In the SME IPO category, however 5 of the 10 IPOs are trading at a price below their IPO price as these IPOs failed to draw ample investor interest.
"There is always an appetite for IPOs at a fair price. Whenever an IPO is overpriced and there is one bad issue, the next one suffers. The performance of one IPO will affect the other. It is a chain reaction. It is the same money that rotates from one issue to the other," said Kejriwal founder of Kejriwal Research & Investment Services. According to him, if an issue is fairly price, the time is always right and hopefully till election results come there will be no major surprise element in the market.
Also, what is needed to draw demand in the IPO market is some reasonable discount to investors that would also help make some money.
Other than MSTC, which is trading at a discount of close to 18% from its issue price, all other newly debuted companies namely Chalet Hotels, Embassy Office Parks REIT, Rail Vikas Nigam, Metropolis and Polycab are trading between 9.5% and 38% higher than their issue price.