Initial public offers are selling like hot cakes even during the recent turbulent times on the bourses, but it has become more of a short-term opportunity with close to 60 per cent of the companies seeing a sell-off by a large number of small investors within days of listing.
An analysis of all the IPOs that hit the bourses in the past one year shows that 43 companies witnessed a decline in the number of shares held by small individual shareholders. This is based on the pre-listing and the mandatory quarter-end shareholding data disclosed by the companies.
As many as 76 companies have come out with their IPOs since August last year and both pre-listing as well as quarter-end shareholding pattern is available for 71 of them.
According to market observers, short-term investors in IPOs tend to sell their shares mostly on the first day -- which is evident from the huge trading volumes recorded by the stocks on their first day on the bourses. Besides, they do not want to take a risk on whether the momentum generated by the IPO would continue, said a broker.
Brokerage firm Motilal Oswal Financial Services Ltd's chairman and managing director Motilal Oswal told PTI: "It is true that a number of investors have started behaving like passengers when it comes to investing in IPOs. They tend to put money in a public issue, book profit from the listing gains and then invest in another IPO," he said.
Incidentally, Motilal Oswal's IPO closed on August 23 with more than 27 times of over-subscription. It is the strong appetite for IPOs that helped the IPO sail through even during the turbulent phase on the bourses, said a broker.
An analysis of all the IPOs that hit the bourses in the past one year shows that 43 companies witnessed a decline in the number of shares held by small individual shareholders. This is based on the pre-listing and the mandatory quarter-end shareholding data disclosed by the companies.
As many as 76 companies have come out with their IPOs since August last year and both pre-listing as well as quarter-end shareholding pattern is available for 71 of them.
According to market observers, short-term investors in IPOs tend to sell their shares mostly on the first day -- which is evident from the huge trading volumes recorded by the stocks on their first day on the bourses. Besides, they do not want to take a risk on whether the momentum generated by the IPO would continue, said a broker.
Brokerage firm Motilal Oswal Financial Services Ltd's chairman and managing director Motilal Oswal told PTI: "It is true that a number of investors have started behaving like passengers when it comes to investing in IPOs. They tend to put money in a public issue, book profit from the listing gains and then invest in another IPO," he said.
Incidentally, Motilal Oswal's IPO closed on August 23 with more than 27 times of over-subscription. It is the strong appetite for IPOs that helped the IPO sail through even during the turbulent phase on the bourses, said a broker.
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