Narendra Solanki cautions against short-term bets on high-flying IPOs
ET Now spoke with market expert Narendra Solanki from Anand Rathi Shares about the surge and what it means for investors.
“You have been tracking IPO markets closely. Groww’s market cap has breached ₹1 lakh crore. But it trades at 25–27 times its top line. Do you think this is justifiable?” Narendra Solanki was asked in an interview with ET Now.
Solanki said: “The post-listing run-up in many IPOs has been strong, and valuations are definitely rich at this point. It may take a few quarters to see how new client additions and overall business performance pan out. Investors focused on the long term were right to subscribe during the IPO.”
On Groww’s 91% return since listing, Solanki added: “It’s an individual call for investors. But equity investment penetration in India is still low, so tailwinds exist for the sector. Valuations have run ahead of fundamentals, so it’s more justified for the medium to long term.”
Turning to the education platform PhysicsWallah, Solanki commented: “The listing was very good, above market expectations. We remain positive on the sector, but valuations are pricey, so long-term focus is advisable.” As investors weigh high-growth IPOs like Groww and PhysicsWallah, experts suggest caution for short-term trades while acknowledging the long-term potential of India’s digital finance and education sectors.
