IPOs in India
Listing Day, Gains and Underpricing
Many IPOs rise on listing day because issuers price them slightly below what the market will pay, but returns after that vary.
A first day pop is common, but not guaranteed.
Listing gain
The difference between issue price and the first-day price.
Underpricing
Issuers often leave some money on the table to ensure the issue sells.
Grey market
An unofficial market trades IPO shares before listing, and its premium is often cited but unreliable.
After the pop
Long-term returns depend on the company’s performance and valuation.
A 30% pop
Shares issued at ₹100 list at ₹130, delighting applicants who got allotments.
Trusting grey market premiums
They are unofficial and can mislead.
Key takeaways
- Listing gains are common.
- Underpricing leaves a cushion.
- Grey market data is unreliable.
- Long-run returns vary.
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