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Today, One 97 Communications or Paytm, got its shares listed in the exchanges at a discount of 9 per cent from its issue price. This broke the trend of startup listing gains. While we may think that this is a typical case for Paytm, it has been the trend for many other companies in the last five years. All those companies had one thing in common - massive issue-size.
The top-10 IPOs by issue-size in the last five years had a median listing gain of -1.6 per cent, with the only major exception being Zomato which had a good listing gain of 51 per cent.
If issue-size does really influence the listing gains of IPOs, then the result should be the opposite for the bottom-10 IPOs in the last five years. We did the number crunching and the result was glaring. The bottom-10 IPOs had median listing gains of 18.4 per cent.
Read more articles where we discuss IPOs:
Investing on listing day: is it a good idea?
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