Key Points
Indian IPOs have failed miserably at generating additional returns for investors over what they would have earned passively from just owning a broad benchmark..
We cynically characterize the IPO process as a scheme orchestrated by management, private equity investors, anchor investors, investment bankers, media, etc., YK2s co-founders Arun Agarwal and Vinod Nair, wrote in a note accompanying their research..
Its the regulators job to ensure that companies with reasonably solid prospects come to public markets and offer stock at a price that allows long-term wealth creation..
There may be a simple reason why verbiage can so easily masquerade as value: The average IPO delivers an average 25% listing-day gain, and Indias rich have a savings glut..
YK2s Agarwal suggests that the SEBI should consider a mandatory lock-in period of one year for all IPO investors so that subscription is driven by fundamentals and not the lure of a pop..
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