Cairn Energy : Listing Strategy

Listing Blues, Investors should avoid dumping stock

Stock : Cairn Energy

Issue Price : Rs. 160

Listing Date : 9th January, 2007

Expected lsiting : Rs. 160-170

When it comes to IPO, everbody wants to make fast bucks and very few people are interested in holding the stock for long term gains. Cairn Energy's issue has been quite volatile in term of turn of events related to the IPO. First there was a enthusiastic feel with Pre-IPO placement by the company and then loomed large the shodows of pessimism on the fortunes of the IPO with the issue barley managing to subscribe fully.

Unfortunately, there has been lot of bad talks in the street about cairn's listing price. People are talking in terms of listing between Rs 125 to 160 range and a atmosphere has been built for the investors to dump the stok on listing day.

There is no doubt that Cairn Energy is a long term stock. The expectation of a good listing gain has certainly been smashed with the poor response to the issue.

Investment Guru is of the view that the stock should list near its issue price and hence doesn't offer much on the listing gain front. Investor who have subscribed with only listing gains in their minds may be well off cornering any premium on listing .

Investor should avoid dumping the stock on the listing day if it lists much below its issue price as there would be a comeback once the euphoria of stress selling dies down and long term pickers start picking the stock at better prices.

Long term investors should be better off holding on to their stocks as the long term prospects looks good for the stock.