Unlisted market: Collateral damage! IPO companies fall up to 50% in the unlisted market
Share prices of companies in the pipeline to issue their issues in the primary markets have eroded nearly half of investors’ wealth in the unlisted market.
Dinesh Gupta, co-founder of UnlistedZone, said: “After burning their hands in unlisted markets, courtesy of Paytm and AGS Transact, investors have become skeptical of new-age companies.
API Holdings, the parent company of medical technology player Pharmeasy, fell around 50% to Rs 65-70 from Rs 130-135 earlier. The company has already filed DRHP for Rs 6,250 crore IPO.
Shares of other new age companies like Mobikwik fell from Rs 1,300-1,400 to Rs 800, taking a hit of 45%, while the price of Fino Paytech fell around 40% to Rs 240 from Rs 400.
Another company linked to the IPO, Sterlite Power Transmission, saw its shares drop to Rs 1,100 from Rs 1,650 earlier. The company has received the green light from Sebi to launch an IPO.
Other companies like Le Travenues Technology (Ixigo), Lava International, HDB Finance Services, Studds Accessories and Fincare Small Finance Bank fell 25-30% in the unlisted space.
Sunil Chandak, equity strategist at Gennext Investrade, said high prices had triggered the collapse of new era companies, especially fintech players. Easy money in the unlisted market is not possible now, he added.
That said, Chennai Super Kings (CSK) emerged as the only exception as its shares gained in the pre-IPO market after the IPL auction and the upcoming season which is expected to start from the last week of March.
IPO of LIC
Dealers in the unlisted space are split on LIC’s upcoming IPO. They think investors will wait for the public insurer’s assessment before betting on the company.
Gupta said the LIC IPO will negatively impact IPO-related companies as the mega issue is likely to suck a large chunk of funds from the markets.
On the contrary, Chandak expects the IPO of LIC to be a big boost for the morale of the primary markets. “Reasonable valuations, retailer discounts and strong listing could revive the attractiveness of the IPO market.”
In line with Chandak’s views, Narottam Dharawat of Mumbai-based Dharawat Securities said that LIC’s IPO will be of great benefit to unlisted and listed spaces as it will usher in a new generation of companies. investors.
Several reports suggest that almost a crore of Demat accounts are expected to be opened ahead of the insurance giant’s mega issue.
“Investors should see the bright side of this,” he added. “New investors will widen the scope of the market, which is a good sign for the market. If they make a lot of money with LIC, feelings for other issues will improve.”