Hi
@Hope is life, you raise a valid question. Let me try to answer it.
I only play retail in the primary market as I believe that a company's stock should only be invested in after price discovery. That can take more than 6 months. As you can guess, this is the foundation of my IPO strategy. Another canon of my equity strategy is "minimize losses". When you add that foundation and this canon, you get my general IPO strategy: sell on listing and secure the capital no matter what. Except in the case of LICI and NUVOCO most recently, I have followed this principle for every IPO. As you can see, both were poor decisions.
My main portfolio is separate from these IPO stocks. I have a concentrated set of 20 odd stocks that I have been accumulating since 2012. I don't deviate from them nor do I sell them ever. Based on my current PF, Raymond is my biggest multibagger at 1200% profit.
Coming to my IPO picking criteria: I weigh every IPO on 13-14 parameters. These are valuations, IPO nature, GMP, PAT trendline, management quality, and EXTERNAL FACTORS. The last point is one of the top 3 parameters; other 2 being valuations and GMP. EXTERNAL FACTORS are important as they help me shed my cognitive biases. I strongly believe that QIB knows a lot better than I do about a company. I don't care about retail or HNI figures.
If an IPO has 2 or all 3 top parameters against it, I avoid them. This is why I avoided TVS SCS, Global Surfaces, Sah Polymers, Radiant Cash Management, Elin Electronics, KFin Tech, Landmark Cars, Abans, Sula, Inox Green, Five Star Business, Fusion Micro, Tracxn, TMB, eMudhra, Ethos, Delhivery, Prudent, Veranda, Uma to name a few since March 2022.
In the case of Concord, you'll see, even though it had 6 red flags out of 13, it faired decent in the GMP figure on day 3, valuations, and QIB. P/E was higher than peers, yes, but I was ready to gamble. A 10% GMP is a good criteria for me. Hence the application.
Another point that I did not mention is "hunch". As someone who has played in the IPO market for over a decade, I sometimes depend on hunch. With Concord, the hunch was strong and I reaped the benefits. With Global Surfaces, it was not and I did not apply and the scrip hit UC on listing day. That's the way of the markets.
Anyone who's following my reviews may do well to follow all the comments I make in a thread. Despite the negativity, I was bullish on this than SBFC as suggests my 2nd comment.
Hope this answers. Keep crowing!
Zerodha (Trading & Demat Account)
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