IPO party may be over !!

IPO (Initial Public offering) was the most happening thing or rather something which attracted almost everyone in last few months. Every Tom, Dawood or Hari with no knowledge of the actual business or the profit margins of the company was more than willing to apply the maximum number of shares offered to a retail investor.

Well, Markets did not play a spoilsport either. Most of the IPO's listed in last few months have made the retails investors happy by not only giving handsome gains on listing but also sustaining the levels. Few examples in last couple of months would be Burnpur cement(listing gains of 350%) (I still regret not applying for this one), Edelweiss Cap(100% premium), Allied Computers (current gains of 191%).

But, as they say Grass is not always green. The present day scenario is a complete different story. The events that took place in last few days are more than terrifying,,,

a) Wockhardt recalls the IPO after poor subscription.
b) Emaar MGF recalls as well.
c) Future Capital (IPO that was oversubscribed 130 times opens with a small premium of 40%)
d) Reliance power (ADAG company), most talked IPO of the year so far falls flat on its face. (closes below the issue price.)
e) J Kumar Infra (listed today and currently trading with a loss of 18%)

I personally applied for both Future Cap and Rel Power, not bothering much about the business model or current valuations or future growth plans. And here I am (always hoped for booking huge listing day profit), sitting with a mere 20% gain on Future Cap and still trying to cope up with the Rel Power disaster.

Lets hope to see those 500+ trading sessions in near future which may bring smiles back for many small investors.

Till then Happy Investing :)
Hanif Merchant