1 week ago
IPO Rush Ahead: What Retail Investors Should Watch Out For
Indian stocks have done worse than many other markets recently.
Jay Kothari thinks this large gap could eventually shrink.
He says Indian companies can still have strong profits and financial performance.
However, India does not have as many hardware and semiconductor companies as some other countries.
A large number of new IPOs could pull money away from existing stocks.
Investors should not buy IPOs just because they are popular.
They should research companies or seek reliable advice.
Kothari also says very large returns are unusual and should not be treated as normal.
Jay Kothari says Indian equities have underperformed emerging and global markets by nearly 70% over two years.
He believes the unusually large gap could eventually reverse and support Indian market outperformance.
India’s missing hardware and semiconductor sectors have overshadowed strong earnings and return ratios in many companies.
The expected IPO rush could divert capital from existing secondary-market shares, including through foreign investor selling.
Kothari advises retail investors to research carefully, avoid hype, and maintain realistic return expectations.
- Who
- Jay Kothari of DSP and retail investors.
- What
- Kothari discussed India’s market outlook, the coming IPO rush, and risks for retail investors.
- Where
- India, compared with emerging and global markets, including Korea and Taiwan.
- When
- Over the past two years for the market-performance comparison; the IPO rush is described as impending.
- Why
- Kothari says investors should account for market underperformance, IPO-related capital shifts, hype, and unrealistic return expectations.
Key facts
- Market underperformance
- Indian equities have cumulatively underperformed emerging and global markets by nearly 70% over the past two years.
- Potential outlook
- Kothari believes the unusually wide performance gap could eventually mean-revert.
- Technology gap
- India has software but lacks the hardware and semiconductor components present in other major technology markets, according to Kothari.
- IPO impact
- Increased IPO supply can divert capital from existing secondary-market shares.
- Investor guidance
- Kothari recommends thorough research or trusted expert guidance instead of blindly following hype.
- Return expectations
- He says 30–100% compound annual growth is genuinely rare across markets.
Quotes
Jay Kothari
DSP investment professional quoted by Mint Money
“Globally, all three components of tech—software, hardware, and semiconductors—are present. In India, there is only one. We do not have hardware and semiconductors, which have driven 50% of the growth in emerging markets and the world.”
livemint.com
“Rather than focusing on market cap buckets, we're focusing on companies that are mispriced, not just because they've underperformed, since underperformance can even be structural”
livemint.com
Sources
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