26 February, 2021

Side Bet Is An Unborn IPO

Pre-IPO trades, with its inherent uncertainty, is a grey area where individual buyers must tread with caution

Side Bet Is An Unborn IPO

Despite huge gains in the Indian stock markets, small investors are frustrated today. They are exhilarated, but agitated and ann­oyed too. As the Sensex boomed from under 26,000 in late-March this year to over 44,000, they missed the opportunities to rake in the riches. Now, the renowned listed stocks are overpriced and beyond their reach. They are wary of the smaller shares, which may be decimated by COVID-19 disruptions. There is too much uncertainty about their future.

Sadly, this option seems like a dead-end too. The promising Initial Public Offerings (IPOs) are hugely oversubscribed, i.e. the potential buyers seek more shares than the available quantity. In Mazagon Dock, investors applied for shares that were 157.41 times the numbers sold. The figures for Happiest Minds and Chemcon Specialty were 150.98 and 149.3 times, respectively. In such cases, people like you and I either don’t get the allotments, or manage a minuscule percentage of what we desired.


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