IPO Frenzy Coming to an End
The benchmark index has corrected 7.4% from its peak in January 2018. Mirroring the subdued market sentiments of the broader indices, IPOs too have not performed well.
Of the eleven IPOs we have covered since the beginning of 2018, seven are in the red zone. The expensive valuation is the key factor leading to these companies trading below their issue price.
At Equitymaster, we have always stayed away from initial public offer (IPO) as most of the time the issues are expensive and the detailed information as required from the management pertaining to the company is not available.
Seven of Eleven IPOs in 2018 in Negative Territory
@ Higher Band
The losses as seen in the recent IPOs have led to companies delaying their offerings. As per an article in Economic Times, atleast six proposed IPOs of companies such as ACME Solar Holdings, Barbeque Nation, Prince Pipes & Fittings, Seven Islands Shipping and Gandhar Oil Refinery have postponed their offer by few months.
Unless the IPOs are decently priced, investors would be better off investing at a later stage when more clarity on the business arises.