Overpriced IPO’s most of them have bombed on Dalal Street of late and investors need to be cautious while applying in public issues these days when premium charged is very high. Make Hay While the Sun Shines seems to be the motto followed by greedy promoters who have been overpricing their IPO’s only because the markets are near to their high levels. SEBI too should act as a watchdog and refrain companies from charging huge premiums and there should be a tested mechanism which disqualifies companies who are trying to cheat investors. Stock prices have risen above their valuations due to liquidity which chase stocks during the bull run. Investors should pause at these times and wait for decent corrections, else lose their hard earned money in this madness and euphoria!
(The views expressed by the author in the article are his/her own.)
