Evaluate company's fundamentals and valuation before investing in IPO

If the firm is of a sound quality but the valuation is high, wait for a price correction

Individual investors sold more than 50 per cent of shares by value allotted to them in initial public offerings (IPOs) within a week of listing, and 70 per cent within a year, according to a recent study by the Securities and Exchange Board of India (Sebi). The study compiled data from 144 IPOs listed between April 2021 and December 2023.

 

Lure of quick gains

 

Experts cite several reasons why retail investors adopt such a short-term approach. One, most investors do not have the skills, nor do they dedicate the time and effort required to analyse every IPO