Cons of Investing in IPOs in India

Investing in IPOs carries inherent risks, as many newly listed companies lack a proven track record and may face uncertainties regarding their future performance.

1. High Risk

IPOs are often subject to market volatility, and their performance post-listing can be unpredictable, leading to potential losses for investors.

2. Market Volatility

Assessing the long-term viability of IPOs can be challenging due to limited historical financial data, making it difficult for investors to make informed decisions.

3. Limited Information

Some IPOs come with lock-in periods during which investors are restricted from selling their shares, limiting liquidity and flexibility.

4. Lock-in Periods

IPOs can be susceptible to underpricing or overpricing, impacting the initial returns for investors. Underpricing may result in missed opportunities, while overpricing could lead to losses.

5. Pricing Uncertainty