Good News For IPO Investors
Most investors who bet their money on initial public offerings during the heady days of the 2007-08 bull market can heave a sigh of relief. The near 80% rally in key indices since March has translated into even bigger gains in the broader market, with the result that many of the recent listings are trading way above their issue prices.
Cairn India, Mundra Port, Power Grid Corporation, Power Finance Corporation, Religare Enterprises and Orbit Corporation are a few notable examples where the shares are quoting at a premium of 39% to 162% over their respective offer prices. This has raised hopes that the IPO market will be buzzing with activity once again.
“The sharp gains in IPOs reflect investors’ renewed confidence in the respective companies. Some of them are fundamentally sound companies, which had been beaten down way below their intrinsic value,” said a merchant banker on condition of anonymity. However, investors should exercise caution while taking call on those newly-listed companies, which do not have any proven track record, said the banker. But some bankers feel it is too early to call a revival in the primary market.
Source:- economictimes
