Mumbai10 minutes ago
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54% of investors in IPO sell their shares within a week of listing. Whereas within a year of listing, this number reaches 70%.
This has been revealed in a study by market regulator Securities and Exchange Board of India i.e. SEBI.
SEBI said in its study that a strong disposition pattern has been observed among investors. Investors first sold the shares whose value increased and held those whose value decreased.
SEBI conducted this study between April 2021 and December 2023. In this, the market regulator studied investor behavior on 144 mainboard IPOs.
Key points from SEBI study…
- Returns were seen to have a huge impact on investor behavior.
- The IPO return rose above 20%, so investors sold 67.6% of the shares in a week.
- At the same time, in case of negative returns, investors held the shares and made only 23.3%.
Over-subscription halved after RBI guidelines
Over-subscription in the NII category declined from 38 times to 17 times following RBI guidelines on IPO financing by Non-Banking Financial Institutions (NBFCs).
Following SEBI’s policy intervention in the NII share allotment process, the average applications from the Non-Institutional Investor (NII) category seeking more than Rs 1 crore in an IPO declined from around 626 per IPO to around 20 per IPO.
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