Beyond The Listing Day: Understanding the short-term dynamics of mega listing IPOs

economictimes.indiatimes.com:

Given the substantial gains witnessed on listing days for recent IPOs, it's understandable why investors are eager to participate. Once investors successfully secure allotments, the next dilemma arises—whether to swiftly sell the shares at the peak of their listing gains or to ride the momentum for a while longer. This article delves into an analysis of the top-performing IPOs with bumper listings over the past eight years, aiming to unravel their short to medium-term performance trends.

The Year 2023 has been a fantastic year for IPO investors, with its top 10 listing IPOs reporting an average listing gain of 83.2%. However, it might surprise you that this is actually the second-best year in the past decade. The best year has been 2021, where the top 10 IPOs reported average listing gains of a mammoth 127.7%.

Further it is interesting to note that, after massive listing gains, the stocks historically have gone on a little correction or have remained sideways for the next one month. From 2016 to 2022, the average one-month gains of the top 10 listing IPOs have been negative four times, flat for one and positive for only two times.

This underperformance of the mega listing IPOs in the short period is further highlighted by the fact that in the current calendar year 2023, 83% of the top 10 listings have reported a negative one month return post the listing day. This trend holds true for other years as