Almost 52% IPO investors sold shares on listing day in April-July FY22

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Almost 52 percent of IPO investors sold shares on the listing day in the first four months of the ongoing fiscal year while another 20 percent sold the allotted shares within the first week of listing on stock exchanges, an analysis by Motilal Oswal Financial Services showed.

Around 64 percent of the initial public offering (IPO) clients applied for at-least two such public issues, according to the broking and distribution business of Motilal Oswal Financial Services Ltd (MOFSL).

The data showed that around 5.7 lakh of Motilal investor clients subscribed to initial share-sales in just 4 months of 2021-22 compared to 5.1 lakh in the entire preceding fiscal year.

Around two-thirds of overall IPO clients have been onboarded from three states — Gujarat, Rajasthan and Maharashtra. MOFSL cited this exponential surge in numbers from 17 IPOs in comparison to 36 IPOs in the last fiscal year.

It, further, said 61 percent of its clients made online subscription for IPO shares. Glenmark Lifesciences received the highest online penetration with 68 percent clients and 71 percent of the overall investment value coming through online channels. So many companies are planning to raise money through primary markets in the remainder of the financial year.

With economic turnaround taking shape and favourable general market conditions, IPO is expected to remain a preferable investment avenue for FY22," Ajay Menon, Whole Time Director & CEO, Broking & Distribution, MOFSL said.

So far this year, there have been at least 40 new listings that have raked in around Rs 68,000 crore and more are in the offing. The depth of investor interest, especially from the retail segment, is much visible with many IPOs being oversubscribed over 100 times and offers worth over Rs 75,000 crore in the pipeline.

Also, reports say the total number of IPOs may well top the 100-mark this year.

Experts believe that high liquidity in domestic and foreign markets is driving the IPOs.