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  • Category: Miscellaneous

    Beware of recent IPOs as 80 percent of your money went to promoters

    Recently, many companies have gone for Initial Public Offering (IPO), because of boom in the Indian stock markets. Till now in 2017, around Rs 57,000 crore has been raised through IPOs. Out of this amount, around Rs 45,000 crore, which accounts to 80 percent of the total money raised, have gone to the pockets of either promoters or Private Equity. That means only 20 percent was used for growth of the companies, which is not a good sign. This means promoters are cashing the market. Retail investors may be tempted to buy IPOs as some of the companies are listed at 50 % premium on the listing day. So, please go through the Red Herring prospectus thoroughly before investing in IPOs and invest in those IPOs, which have a potential for growth.
  • #614540
    I sincerely thank Mr. Bhuvan for this timely thread and timely warning.There are many IPOs coming to the market. Investors must be extremely careful before investing. They should read the 'Red Herring' document very carefully and check about the IPO from independent market analysts.
    Beware! I question everything and everybody.

  • #614542
    Thanks to Bhuvan for the thread. Many people don't understand the problems in this stock market. In the document, they will give the threats involved in that particular company shares. One has to read the document properly and then only should go for that purchase. As far as I am concerned I don't have any knowledge on this subject. I have a friend who is very good in this and he maintains my portfolio also. So I will discuss with him and go as per his advise.
    But this thread is very useful to many as it gives an alert to the buyers.

    always confident

  • #614543
    This is a good alert for those who trade in the stocks and want to get benefit. But from the revelations it is quite clear that all that is known and mentioned by author are different and those who have close rapport with the market can only get benefited otherwise lame investor money goes to the personal account of the owners and promoters and next time the company may not fare well or shut down. Invariably this kind of fly by night appearing and disappearing companies are happening in the recent past and any new investor must consult the expertise and then proceed to invest.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #614609
    A good message indeed. Many people without knowing these just get into share market with the aim of making quick money.
    "Do not give up, things might not favour you always"

  • #614616
    Many people buy IPOs as it does not have a brokerage for the purchase that would be paid extra and for the premium that many IPOs attract on a listing day. Agreed, recently there has been a flood of IPOs in the market and some have given good returns (Cochin shipyard, Apex frozen and Agrovet) but the last three insurance-related IPOs have failed to impress. we should read the analysis, prospectus and the valuations before investing in it blinds. Invest what you can afford to lose and don't invest so much that you lose your sleep over it.

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