Flipping (IPO)

The listing-day rush

Walk into any IPO-frenzy in India and you'll find a large chunk of applicants who never intended to *invest* — they intended to *flip*. They apply hoping for an allotment, wait for the stock to list (often at a premium), and sell within minutes, hours or days to bank the listing gain.

It's a perfectly legal, rational strategy in a hot primary market. The data backs up just how widespread it is. A SEBI study of IPOs listed between April 2021 and December 2023 found that investors sold about 54% of allotted shares (by value) within a week, and roughly 70% within a year. This is flipping at scale.

The behaviour behind it

The SEBI study revealed something psychologically telling: a strong disposition effect. Investors rushed to sell their *winners* far faster than their losers. When an IPO listed with gains above 20%, individuals dumped around two-thirds of their shares within a week — but held on tight when the stock listed below issue price.

In other words, Indian retail behaviour is to grab quick profits and stubbornly nurse losses — the exact opposite of disciplined investing. Non-institutional investors (the HNI category) flipped even more aggressively than retail.

Is flipping smart?

It depends on what game you're playing. If you applied purely for listing gains and the stock pops, flipping is the logical exit — you locked in the trade you intended. The grey market premium gives a rough preview of likely listing gains, though it is unofficial and unreliable.

My view: flipping is fine as a stated strategy, but dangerous as a default habit. Two traps stand out. First, you systematically sell your best companies on day one and miss the multi-year compounding that genuine winners deliver. Second, in a cooling IPO market — and India has seen plenty of post-listing reversals, especially in SME IPOs — the listing pop can vanish, turning a flip into a loss. Decide *before* you apply: am I an investor or a flipper? Pretending to be both is how retail money gets hurt.