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Thursday, December 6, 2012

Tara Jewels IPO: Closes below Listing price on Debut Day!

We wrote about Tara Jewels IPO here, a fortnight back, as to how the issue is not worth investing for a value investor and some questions that were lingering around the issue.

Tara Jewels made its debut today and although opened with a meager 5% premium to listing price of Rs 230, immediately started tanking without showing any upward momentum. With a volume of about 4.8 Lakh shares, the scrip closed below its IPO price of Rs 230 and closed at Rs 229.9 in first hour itself.

Now investors are currently losing only 10 paisa per share, but lot of investors would look at this fault line of Rs 230, and would try to get out of this issue as soon as possible. This leads to a scramble and flurry of sale orders, and in absence of any promoter led support, scrip may see further price erosion.

This has been the fate of many other overvalued scrips in last one year. Scrips have tanked on debut day and take very long to recover to its IPO price, which starts acting as stiff resistance to price technically.

Thanks for reading this note and keep writing in to us.

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