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For those looking at future IPOs, Harsh Goenka has a piece of advice

Amid IPO frenzy, business tycoon Harsh Goenka has a word of caution for retail investors. Noting that there might be another ‘dotcom like collapse’, he said, “retail shareholders are going to get burnt.”

This week itself, two companies – Go Fashion (India) Ltd, which owns women’s wear brand Go Colors, and Tarsons Products launched their IPOs. Meanwhile, Sapphire Foods and Paytm make their market debut today. 

Taking to Twitter on Thursday Goenka said, For those who subscribed to the IPOs – let it be a lesson. For those who are looking at future IPOs – be very careful. Go back to the basics- profits, free cash flow, PE multiples.

I can visualise another dot com like collapse. And the retail shareholders are going to get burnt, he added.

For those who subscribed to the IPOs – let it be a lesson.For those who are looking at future IPOs – be very careful.Go back to the basics- profits, free cash flow, PE multiples.I can visualise another dot com like collapse. And the retail shareholders are going to get burnt.— Harsh Goenka (@hvgoenka) November 18, 2021

Meanwhile, empathizing with Paytm IPO investors, after the company makes a tepid entry to the stock markets, Anand Mahindra posted on Twitter: My heart goes out to individual IPO investors who must be rattled but I’m sure Paytm will find its right level. There is, however, a silver lining to this sobering debut: it could moderate the casino-like feeding frenzy for IPO listings & help restore the hunt for true value. 

The Paytm stock is listed at ₹1,955, tumbling 9 per cent from the issue price on the BSE. During the day, it tumbled 27.25 per cent to ₹1,564. It tanked 27.24 per cent to settle at ₹1,564.15.

On the NSE, it debuted at ₹1,950, registering a decline of 9.30 per cent against the issue price. The stock plunged 27.44 per cent to settle at ₹1,560.

The three-day IPO of Paytm’s parent One97 Communications was launched on November 1 and concluded on November 3 with a price band of ₹2,080-2,150 per share. It was oversubscribed 1.89 times on the last day. However, ahead of listing, brokerage firm Macquarie Research initiated an underperform rating on the company questioning its business model.

(With inputs from agencies)

 

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