Will Retail Investors Flock In?
Business World India|01 July 2023
INDIA HAS WITNESSED increased retail investor participation in recent years, driven by factors such as easier access to markets, technological advancements, and a desire for diversification.
Will Retail Investors Flock In?

Retail investors have shown enthusiasm for initial public offerings (IPOs), seeking to capitalise on potential gains during the listing period.

After a market lull, as the IPOs seem set to make a comeback, what can retail investors expect this year? Will they flock to the markets? The previous season of flow had been driven by robust investor appetite, improved market conditions, and a wave of entrepreneurial enthusiasm. Several high-profile IPOs had attracted substantial investor interest, leading to over subscription and impressive listing gains.

Do the upcoming IPOs mean potentially good investments for retail investors? As the IPO season unfolds in India, retail investors are faced with crucial decisions that can impact their financial well-being. With heightened market volatility, the fear of missing out (FOMO), and concerns over potential valuation slumps as in the previous season, it is essential to examine the landscape carefully.

At the same time, the market has been witnessing significant fluctuations in recent times, partly owing to global economic uncertainties and local factors. Investors must acknowledge the inherent volatility and be prepared for short-term market turbulence.

This is where the markets regulator, the Securities and Exchange Board of India (SEBI) has been bringing in steady regulatory improvements to refine disclosures and the quality of disclosures for IPOs. But then, the regulator cannot solve for investors’ greed or irrational behaviour like FOMO. Also the regulator cannot solve for valuation pricing or investors’ not doing their research.

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