'IPO Trading In Gujju Genes' Says Zerodha's Nithin Kamath Referring To SEBI Study

Zerodha Co-founder Nithin Kamath remarked on Tuesday that "IPO flipping (trading) is in the Gujju genes,"  referring to a SEBI study that was released on Sept. 2.

The study found that 39.3% of retail investors involved in IPO flipping were from Gujarat, followed by Maharashtra (13.5%) and Rajasthan (10.5%).

The SEBI study titled 'Analysis of Investor Behaviour in Initial Public Offerings,' which was undertaken by the Department of Economic and Policy Analysis, highlights widespread flipping behaviour among investors in the IPO market, revealing notable trends in how different investor categories manage their allotted shares.

"Gujarat accounts for about 9% of the total investor customer base, but they account for 40% of IPO participation in both retail and HNI categories. IPO flipping (trading) in the Gujju genes. This data is from SEBI's study on IPOs," Kamath wrote on X.

With regards to the geographical spread of investors in IPOs, it was observed that about 70% of the IPO investors were from the four key states: Gujarat, Maharashtra, Rajasthan, and Uttar Pradesh. 

The SEBI study further indicated that approximately 54% of IPO shares, in terms of value, were sold within a week of listing, with individual investors showing a pronounced tendency to exit quickly.

Individual investors sold 50.2% of their allotted shares within the first week after listing. Of these, non-institutional investors sold 63.3% of their shares by value, while retail investors sold 42.7% of their shares within the same time frame.