Will it be worth investing in Cairn India IPO?

Question

Regarding Cairn India IPO opening on 11th Dec. 06.

Answer 1

YES

Answer 2

More often than not, IPOs emerge with a great deal of hype. Every once in a while, the stock of an IPO takes off immediately. Every once in a while, somebody also wins the lottery. In other words, it does not happen often enough to invest good money in it.

The best strategy is to wait about six months after the IPO. At that time, (1) those who profited by getting in before the company went public will have already sold their shares and moved on;(2) the hype surrounding the IPO will have dissipated; and (3) you will have a quarterly report in hand to see how the company is actually doing financially.

So, when you see what looks like a hot IPO, calm yourself, recognizing the hype for what it is, and wait six months. If it still looks good, then go for it. Most of the time, you will be getting in at a better price than if you had bought on opening day. If it turns out the stock takes off immediately, don't be upset. There are plenty more to choose from.

Best of success.

Answer 3

Studies have shown that IPO's are usually overpriced and usually do worse in the long run. Although you may find counterexamples to this such as NYMEX and Microsoft, IPO's are generally not a sound investment. At IPO time the excitement over the stock is usually at an all time high. It would probably be better to wait a while, maybe a year or so until the stock drops to a better price. I haven't taken a look at this particular company yet. If you really believe that its IPO seems reasonable then go ahead and buy it, but don't do anything based solely on my suggestion. Do your own research and use that to decide.

Answer 4

I dont know, but Merill Lynch the big merchant bankers, have taken a 10 percent stake in the company. Going by the name cairn india, it looks as though there is original cairn company too.
But my point is that if you take any stock in an IPO, it will do good, and rise much above the offered price. It is always a win-win situtation, and in the case of cairn india it should do well, because of the first reason. (I assume)

it would be at its peak in 2009

Answer 5

Invest for long term or listing gains.
Majority of investment advisors said - "apply" to this issue.
This is a major IPO & should not be missed, however read the sify link(invest at cut-off) to understand about the rajasthan project before taking exposure.
I personally have invested but taking limited exposure.

Answer 6

In the current Market Scenario , investing in IPO's have gave god returns to the investors, SO, if you are wiling to book profits at listing you may go well through this issue.

Thanks