Dealing with IPO Shares

If u consider stats the best thing to do is to flip an IPO because that will be the only way you make money 2 out of 3 times u invest.

Business Standard has this great article on the underwriting business of the Ibanks and how their issues/ IPOs have fared.

TOP 10 UNDERWRITERS
(For IPOs since Jan 2007)
Out-
perform
Sensex
Under-
perform
Sensex
Below
issue
price
Above
issue
price
Total
Enam Securities 16 30 30 16 46
Kotak Mahindra Cap 15 31 30 16 46
ICICI Bank 7 18 15 10 25
SBI Capital Markets 7 17 16 8 24
JM Financial 5 16 15 6 21
Edelweiss Capital 4 15 16 3 19
Morgan Stanley 3 12 11 4 15
Keynote Corporate 6 9 8 7 15
Citi 8 6 6 8 14
IDFC Capital 4 10 10 4 14
Total 75 164 157 82 239
(Figures in numbers)                     Source: Bloomberg                             Compiled by BS Research Bureau

An investment banker said on the condition of anonymity that “it is difficult to say who takes the pricing call — the company or i-banker as several PSUs are influenced by the broader market and many have not done well. PSUs are supposed to leave something on the table for retail investors.”… BS

Points to ponder

1. PSU shares are no more safe bets cause most PSU Issues are under water.

2. IPOs are managed (especially small issues) and operators exit soon after the issue lists, landing hapless small investors  with losses.

3. High IPO Rating does not meen the issue is good. The price at which the good company is selling share is the determining factor.

So Caveat Emptor

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