Why SME IPO investors need to tread carefully? Neeraj Dewan explains
«So, some will burn their fingers and some, based on the awareness exercise, will become aware and start investing in more high-quality names rather than investing in any other second IPO which is coming,» says Neeraj Dewan, Market Expert.
Let us get a comment from you also going on this SME hullabaloo. Some are calling it casino, some are calling it gambling den, some are calling in Hindi juye ka adda. What is happening there?
Neeraj Dewan: Definitely the kind of frenzy which is there and we have seen these cases of small companies getting 100x, 200x, 400x kind of subscription amounts. So, one has to be careful, but what can be done according to what I understand is that there should be some awareness exercise which can be initiated, whether it is the regulator or whether it is the market experts, whether it is the media channels.
So, this awareness is what is important. You cannot really tell someone not to invest in a stock. You have to make them aware that you have to invest in a stock based on valuation.
Everything that you invest in has to be studied properly because you are putting your hard-earned money into work there. I think awareness is what is important. And once people get aware and some of them will definitely burn their fingers in the process when some of these SME IPOs or the companies can go kaput and all of a sudden they stop trading.
So, we have seen that happening earlier also so which may happen. So, some will burn their fingers and some, based on the awareness exercise, will become aware
