IPO Market: Since 2023, the number of IPOs on the stock market has been increasing rapidly, benefiting companies and investors tremendously. A report by market regulator SEBI revealed that more than 50 percent of retail investors are making profits by selling the shares allotted in the IPO within a week of listing. They are not making long-term investments.
54 Percent Of Shares Are Sold In A Week On Positive Listing
SEBI said in its report on Monday that according to the data of 144 mainboard IPOs between April 2021 and December 2023, there has been a tremendous increase in the sale of shares after IPO listing. About 54 percent of investors sell their shares within a week of positive listing.
On the other hand, anchor investors must hold their shares for long due to the lock-in period. Individual investors sold 50.2 percent of the shares they received within a week of listing. Non-institutional investors (NII) sold 63.3 percent of the shares in terms of value. Retail investors sold 42.7 percent of the shares. Individual investors sell 70 percent of their shares within a year.
Shares Are Sold In Large Numbers As Soon As There Is A Profit Of More Than 20 Percent
According to SEBI, the flipping trend has been observed among individual investors. The number of demat accounts has also increased due to the high returns received through IPOs. A large number of demat accounts have been opened after the Covid pandemic. Investors have shown a desire to quickly sell the shares received in the IPO. It has been said that if the IPO return exceeds 20 percent, individual investors sell 67.6 percent of the shares within a week. If the return is negative, only 23.3 percent of the shares are sold.
There Has Been A Huge Drop In The Applications Of NII Investors
SEBI changed the NII share allotment process in April 2022. The Reserve Bank of India (RBI) also changed the rules for financing IPOs by NBFCs. After this, the NII category’s oversubscription has decreased from 38 times to 17 times. Also, there has been a huge drop in the applications of large NII investors. The average number of NIIs applying for more than Rs 1 crore in IPOs has decreased from 626 per IPO to about 20 per IPO.
