Expert Alert: Investors Don’t Understand Every IPO Lottery Ticket


  • First Global Chairperson and MD Devina Mehra advises investors on IPO
  • Many investors will still have fresh memories of DLF and Reliance Power’s IPOs
  • Infosys IPO, on the other hand, got a huge subscription

There have been many IPOs in the Indian stock market in the last few months. Most of these IPOs have created a stir. This is the reason why investors are attracted towards IPOs. However, it is the turn of many investors to cry over Paytm’s IPO. The listing of shares of One97 Communications, the parent company of digital payments company Paytm, was disappointing. Its issue price was Rs 2,150, which fell 27 per cent on the day of listing. The company’s stock was listed on the BSE at Rs 1,955, down nine per cent. Whereas during the day it had come down to Rs 1,564.

First Global Chairperson and MD Devina Mehra has advised investors about the IPO. He spoke to our correspondent Economic Times in which he said that investors should not look at every IPO as a lottery ticket.

You have seen a lot of bicycles, TMTs flying in the sky and later falling to the ground, the sun shining and now it is the turn of startups that have become new tech companies. What do you think about the new technological cycle?

Devina Mehrau yea al that sounds so crap to me it seems bt isn’t even for me. Looks like BT isn’t for me either. In fact, recently I was reading about this IPO frenzy in Paris Bourse in 1881. The magnitude of the IPO is not a recent event and is similar to the short-term prospectus offered with food and drink. So new listings attract a lot of people. This is an old phenomenon.

Everyone is aware of Reliance Power’s IPO in India too which later flopped. DLF was also a hot IPO. At the time of listing, it had more than doubled the IPO price, but broke after a few months and has not reached the IPO price since then. On the other hand, the IPO of Infosys was under-subscribed, about which very few people knew.

So the first thing I want to say is that whatever frenzy that occurs in IPO listings, in or after a particular IPO, is often not a good sign for a company’s long-term prospects. Now when it comes to New Age tech IPOs, first of all many of them aren’t actually tech companies. They are using digital platforms to acquire customers. So there is no entry barrier. The biggest hurdle is how much money you can afford to get customers. So whoever has a lot of money will do well. This is the most important and big thing.

Actually companies going for IPO are on the downside as they go for IPO whether it is Paytm, Zomato or Policybazaar, they reduce the promotional cost to show slightly better figure which in general means less loss and in fact there is no increase in profits. in the first place.

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