IPOs have valuation, information risks: Wait for some time after listing

Over the past year, 39 initial public offers (IPOs) of more than Rs 1 billion have hit the markets (we have deliberately ignored the smaller-sized IPOs, where the companies tend to be less well known, and hence riskier). Of these, 21 have given positive returns while 18 have given negative returns (see table). Only 14 of these 39 IPOs, or around 36 per cent, have managed to beat the returns that an investor could have earned by simply investing in a Nifty-based exchange-traded fund (average return 13 per cent over past one year). Moreover, if you had bet on one of the poorer-quality issues, yo.....

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