People do not invest in IPO for a long time, sell 54% shares in one week, SEBI study reveals – IPO investors sell 54 percent shares in one week according to SEBI study

2024-09-04 14:09:37
New Delhi: Investors investing in IPOs (excluding anchor i.e. big investors) sell 54% of their shares (in value terms) received in the listing within a week. At the same time, this number reaches 70% within a year of listing. This has been revealed in a study by market regulator SEBI. According to SEBI’s study, investors first sold the shares whose value increased and held those whose value decreased. SEBI conducted this study between April 2021 and December 2023. In this, the market regulator studied the behavior of investors on 144 mainboard IPOs. SEBI has conducted this study in view of the increasing participation of retail investors in IPOs and a large number of bids.
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What does SEBI’s study say?
According to a SEBI study, individual investors sold 50.2% of the shares (in value terms) they received within a week of listing. While non-institutional investors (NIIs) sold 63.3% of the shares and retail investors sold 42.7% of the shares. Interestingly, individual investors sold 70% of the shares in value terms within a year.

What is the strategy of mutual funds?
Mutual funds invest in IPO shares for a long period of time, while banks sell them quickly. Mutual funds sold about 3.3% within a week, while banks sold 79.8%.

What is the impact of returns?
According to the study, returns had an impact on selling. When returns on IPOs were more than 20% within a week, retail investors sold 67.6% of the shares by value. In contrast, when returns were negative, investors sold only 23.3% of the shares by value.

What does the growing participation of demat accounts say?
The increase in IPO participation can be seen based on the increased number of demat accounts. According to the study, almost half of the demat accounts applying for IPOs between April 2021 and December 2023 were opened during the post-Covid period 2021-2023.

Which state has more participation?
Talking about states, retail investors of Gujarat received 39.3% of the allocation. It was followed by Maharashtra (13.5%) and Rajasthan (10.5%). Let us tell you that this study was done between April 2021 and December 2023. In this, the behavior of investors was studied on 144 mainboard IPOs.