'Doesn't Make Sense': Samir Arora Not In Favour Of Buying Stocks At Big Premium After Urban Co's Listing
At a time when Urban Company listed at a premium of over 50%, Helios Capital's Samir Arora believes that buying recently listed stocks at a massive 50% premium does not make sense.
Speaking to NDTV Profit, the market veteran claimed that initial public offerings (IPOs) are not an ideal way to realise values, adding that it is not easy to trade in the IPO market.
“IPOs will not give any value. IPOs are doing well right now, and many may feel like this trade is too easy. It is not at all easy," said Samir Arora, founder and fund manager, Helios Capital.
"There is that initial pop which happens in every good market. But after that, to buy at 50% premium doesn’t make sense. It has to settle," he added.
Samir Arora's statement comes in the wake of three new listings on Wednesday's trade, headlined by Urban Company, which listed at a premium of 57%.
Shringar House of Mangalsutra, listing at 14% premium and Dev Accelerator, listing flat, were the two other key listings on Wednesday.
Renowned expert with a long-term focus on Indian equity markets, Samir Arora has three decades of experience in investment management.
The Helios Capital founder went on to talk about platform companies and whether or not their recent performance is a sign of a consumption boost.
Arora, though, explained that companies like Zomato, BlinkIt, Swiggy and even Urban Company, for that matter, are merely signs that consumer habits are changing.
"Mode of spending that money has changed. Talking about food delivery and quick commerce, it’s not growing because people have more discretionary spends," he said.
"Consumers are just using these apps instead of using other channels. It’s not that you are spending more money, it’s just that you are not using physical cash," he added.
