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Research Advises Caution on IPO Investments

Research Advises Caution on IPO Investments
Should you buy every IPO? Research suggests patience may be the smarter strategy · businesstoday.in

Investing in initial public offerings (IPOs) can be exciting, but research shows that many IPOs don't perform well over the long term.

While IPOs often have big first-day gains, these benefits usually go to big investors, not regular people.

In India, many companies are planning to go public, but experts say investors should be careful.

They should wait for the hype to die down and look at the company's value and fundamentals before investing.

This way, they can avoid making impulsive decisions and find better investment opportunities.

Key facts

Average First-Day Gains (US IPOs)
18-19% since 1980, over 60% during the dot-com boom
Projected IPO Fundraising in India (2026)
$20 billion
Lock-Up Period Impact
Stock prices often decline when lock-up periods expire
Underperformance of IPOs
Newly listed companies underperform comparable firms by 5% annually over five years
Number of Companies Preparing to Go Public in India
More than 250

Sources

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