Ipo: IPO-bound players see up to 65% value drop in unlisted market - The Economic Times

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Ipo: IPO-bound players see up to 65% value drop in unlisted market - The Economic Times

IPO-bound players see up to 65% value drop in unlisted market.
The recent correction in the broader markets and dull listing pops due to ultra higher valuations is weighing on the sentiments in the listed space.
New Delhi: IPO-bound unlisted shares are facing a long winter following a series of muted listings of some big bang IPOs and recent silence in the primary markets.
The shares of the companies, available in the pre-IPO market, have taken a blow, primarily those which either have filed their DRHP or are planning to float their issue in near future.
According to dealers active in this segment, the recent correction in the broader markets and dull listing pops due to ultra higher valuations is weighing on the sentiments in the listed space.
Dinesh Gupta, Co-founder of Delhi-NCR based UnlistedZone said that majority of shares have witnessed a sharp correction of up to 30-35 per cent from their peaks and the IPO bound companies are leading the way.
Echoing the similar views, Sandip Ginodia, CEO of Altius Investech said, "This correction was due as the euphoria settled. Overvaluation can not sustain for long."
AGS Transact Technologies, an integrated omni-channel payment solutions provider, has faced the worst wrath as it has eroded about two-third of its value from its peak of Rs 550 to trade at Rs 175 in the unlisted space.
Anil Agarwal led Sterlite Power Transmission has dropped about 25 per cent to Rs 1,250 from Rs 1,650. The company is expected to launch its Rs 1,250 crore IPO later this month.
Five Star Finance, which received Sebi's nod to launch IPO on Monday, has declined more than 10 per cent to Rs 670 from Rs 750 earlier. The company is likely to raise Rs 2,752 crore via primary route.
"The mega IPOs of Paytm and Star Health were practical learning lessons for the investors, which fell flat due to their aggressive pricing despite the backing from the biggest names of the stock markets."
Many investors have burnt their hands in One97 Communications before the IPO as the counter had zoomed Rs 3,800 (adjusted price) over the euphoria.
"Things will be streamlined once the primary market is geared up for a new tranche of IPOs," Ginodia said. "Market participants should keenly eye the financials and valuations, even in the pre-IPO space as well."
Among other unlisted stocks, Lava International has tanked over 20 per cent to Rs 190 from Rs 240 a piece. The mobile maker is awaiting Sebi's go-ahead for the IPO.
Pharmeasy's parent, API Holdings has declined about 30 per cent each to Rs 100 from Rs 140. Another IPO bound startup, Mobikwik has dropped 32 per cent to 900 from Rs 1,300.
Equity investors try to chase the trend and often lose money, cautioned Ginodia. "Such corrections are not new and are healthy for investors to buy some value picks."

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Source: Ipo: IPO-bound players see up to 65% value drop in unlisted market - The Economic Times

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