IPO vs QIP shares: Which is the better investment option for retail investors in the current market scenario?
With the Indian primary market buzzing with the news of around ₹30,000 crore being raised through fresh Initial Public Offerings (IPOs) in the next two months, retail investors are eagerly awaiting the launch of IPOs from quality business houses like Bajaj Housing Finance, Haldiram, Prestige Estate, Ola Electric, Swiggy, Waree Energy, and more. However, experts are suggesting that the Indian stock market is gearing up for a fresh rally under Modi 3.0, with the continuity of policies in business and economy-related ministries.
In a bull market, companies often offer IPOs at higher valuations due to positive sentiments in the secondary market, potentially leading to overpriced shares and losses for investors. On the other hand, Qualified Institutional Placements (QIPs) offered by listed companies can provide retail investors with value picks at lower prices, leaving room for potential gains.
Avinash Gorakshkar, Head of Research at Profitmart Securities, highlights the benefits of QIPs in the current market scenario, where companies may launch IPOs at inflated valuations. He suggests that retail investors should consider factors like a rise in premium post-QIP announcement, strong response by QIP investors, a robust balance sheet, and strong quarterly numbers before investing in QIP stocks for medium to long-term gains.
While IPOs may be enticing during a bull market, retail investors are advised to exercise caution and consider the potential advantages of QIP shares in making informed investment decisions. It is essential to consult with certified experts before diving into any investment opportunities.
