SEBI Study Reveals Investor Flipping Trends in IPO Market

A recent SEBI study on IPO market trends shows a strong dispositional effect among investors, with 54% of IPO shares being sold within a week. The analysis includes data from 144 IPOs between April 2021 and December 2023, highlighting varied selling behaviors across investor categories and geographical regions.

A comprehensive study by the Securities and Exchange Board of India (SEBI) has revealed a notable flipping behavior among investors in the initial share-sale market. According to the report, 54% of IPO shares allocated to non-anchor investors were sold off within a week.

The study indicates a strong dispositional effect, where investors were more likely to sell IPO shares that yielded positive gains upon listing, rather than those that ended in losses. This analysis covered 144 IPOs listed between April 2021 and December 2023, during which these IPOs collectively raised Rs 2.13 lakh crore.

The study further illuminated the varied selling behaviors among different categories of investors. Mutual funds displayed a longer-term approach to IPO shares, whereas banks swiftly disposed of 79.8% of their allotted shares. Retail investors from Gujarat led in IPO share allotment in the retail category. Policy changes by SEBI and RBI have also impacted the subscription and exit patterns among Non-Institutional Investors (NIIs).

(With inputs from agencies.)