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Paytm, Mobikwik, Nykaa and others to list soon: Here’s how retail investors can pick the right IPOs

You may have a short-term view and invest a few thousands to get some cool listing gains. But real wealth is created when you invest in good companies and hold them for years

October 28, 2021 / 10:06 AM IST

If the mood of the Indian markets remains bullish for a few more months, then I am sure that 2021-22 will set a new record for the money raised in IPOs (initial public offers). There is a flood of IPOs slated for Oct-Dec 2021 and Jan-Mar 2022. Many of these are popular names: Paytm, PolicyBazaar, Star Health, Nykaa and MobiKwik. And if that wasn’t enough, then the big daddy LIC, too, will be here with its monster IPO – expected to exceed Rs 75,000 crore.

But the favourable conditions and the momentum of secondary markets aren’t the only factors in paving the way for these IPOs. The increased interest of first-time investors (armed with new stock-market apps) is also helping boost the confidence of IPO-bound companies.

I have often shared my views on IPO investing and why it’s better to just avoid them. IPOs may look like avenues for quick money. But by design, IPOs are always overpriced. And even though many recent IPOs have delivered stellar returns to investors, that is no guarantee for all future IPOs doing well.

You may have a short-term view and want to invest a few thousands to get some cool listing gains. But real wealth is created when you invest in good companies, hold them for years and allow your investment to compound by leaps and bounds.