During the study, 39.3% of retail investors were from Gujarat, 13.5% from Maharashtra, and 10.5% from Rajasthan.

IPO investors sell 54% of shares in a week: SEBI report reveals - 68% of shares are sold in a week at more than 20% return

Investors in IPOs sell 54% of their shares (in value) within a week of listing. Within a year, this figure reaches 70%. This has been revealed in a study by market regulator Securities and Exchange Board of India (SEBI).

SEBI said that there is a strong pattern of selling shares among investors. Investors quickly sell shares whose value increases, and they retain those whose value decreases. SEBI studied investor behavior on 144 major IPOs from April 2021 to December 2023.

Key findings of the SEBI study:

If the IPO return rises above 20%, investors sell 67.6% of the shares within a week.
In case of negative returns, investors hold the stocks and only 23.3% are sold.
Investors sell 50.2% of allotment shares within a week.
Non-Institutional Investors (NII) sell 63.3% of their shares and retail investors sell 42.7% of their shares.
Mutual funds invest in IPO shares for the long-term, while banks sell quickly. Mutual funds sold about 3.3% of the allotted value within a week, while banks sold 79.8%.
During the study, 39.3% of retail investors were from Gujarat, 13.5% from Maharashtra, and 10.5% from Rajasthan.

Decrease in over-subscription after RBI guidelines

Following the RBI guidelines, over-subscription in the non-institutional investor (NII) category in IPO financing by NBFCs declined from 38 times to 17 times. The number of investors applying for shares worth more than Rs 1 crore from the NII category was 626 in FY2022, which declined to 20 in FY2023.

In 2022, funds worth Rs 1.11 lakh crore were raised through 50 IPOs.