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.

10 comments:

Manish said...

Dear Sir,
I have been alloted 200+ shares ofciarn. Would it be a good idea to accumulate more if stock opens at 120 and average out ?
Pl. guide

Manish

amit said...

Rajesh is it wise to buy mahindra and reliance at curent levels.......what do you say sir......

abhishek said...

hi
need ur view

bought few shares some time ago on 2nd jan , it should delivered on 4th Jan but it didnt get credited into my account till today.
but price falled 20% in this period, so what should i do ?

Rajesh Soni said...

Hi Manish
If you have applied with lsiting gains i mind I would suggest that you try to get out at minimal loss possible. Would suggest you to take a one week horizon for the stock to stabilise and whenever you see opportunity in terms of better price, get out of the stock.

Rajesh Soni said...

Hi Amit,
Markets would remain volatile in coming days, so use the downfalls to enter into these stocks.

Rajesh Soni said...

Hi Abhishek,
Are you dealing with local broker or Online trading? If you are doing online trading,the stock must have come to you by now. check if the trade actually happened or not.

abhishek said...

Hi Rajesh

I am doing online trading, I have received Digital Contrats Which means that tradding really happens I am talking about NISSAN Copper Still Share is not received

Let me know your view ? Thanks a lot

Abhishek

paraypan said...

Dear Sir
You have a very nice blog with a lot of usefull info, i think it would a great one if you would put some tutorials about online trading.
Thanks

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Anonymous said...

Dear Sir, I have bought 100 shares of Shipping corp @166. Should I hold or sell ? I can hold for 6 months period.