The hype around a hot Listed IPO is hard to ignore. Headlines scream massive oversubscription, social media buzzes with Grey Market Premiums, and everyone seems to be applying. The Fear of Missing Out (FOMO) kicks in — but smart investors know that chasing IPOs blindly can lead to regret later. Learning how to manage this FOMO, especially when dealing with both Listed IPO and Closed IPO phases, is crucial.
Understand the Closed IPO vs. Listed IPO Stage
A Closed IPO refers to the period after the IPO subscription window ends and before the shares are listed on the stock exchange. This is where anticipation builds. Once the shares start trading, it becomes a Listed IPO. Most FOMO kicks in during this transition — especially when there’s media noise around expected listing gains.
Why FOMO Can Be Dangerous
FOMO-driven decisions often ignore fundamentals. Many investors rush to buy on listing day without looking at the company’s valuation, financials, or sector outlook. This herd mentality can lead to buying at inflated prices — and eventually, disappointment if the stock corrects sharply post-listing.
Strategies to Avoid FOMO in Listed IPOs
-
Wait for Volatility to Settle:
Instead of rushing to buy as soon as the stock lists, wait for a few sessions. Often, the price stabilizes or corrects after initial excitement fades. This gives you a better entry point based on rational analysis.
-
Study the Business, Not Just the Buzz:
Dig into the company’s prospectus, check past performance, peer comparison, and sector trends. If the fundamentals don’t align with the hype, it’s best to skip or wait.
-
Watch for Lock-in Expiries:
Anchor and pre-IPO investors have lock-in periods. Once these end, stocks sometimes face selling pressure. Planning your entry after this window can help you avoid overpaying.
-
Check Promoter Holding and Use of Funds:
High promoter holding and clear use of IPO proceeds for growth (not just debt repayment) are positive signs. Avoid IPOs where promoters are exiting or cashing out heavily.
-
Focus on Long-Term Potential:
Ask yourself: “Would I buy this stock if it wasn’t an IPO?” If the answer is no, avoid getting swept up in temporary excitement.
-
Use Past IPO Trends as a Guide:
Not all high-profile IPOs deliver returns. By reviewing patterns from past IPO listings, you’ll notice many stocks that listed at a premium ended up below issue price within months.
Final Thought
Avoiding FOMO in a Listed IPO doesn’t mean avoiding IPOs altogether. It means taking a disciplined, research-driven approach. The transition from a Closed IPO to a Listed one offers plenty of learning moments — and by sidestepping impulsive decisions, you give yourself a better chance of long-term success. Remember, not every IPO is a golden ticket — sometimes, patience is the best investment strategy.
