Shankar Sharma Slams India's IPO Market Amid Lenskart Buzz
Veteran investor Shankar Sharma criticizes India's IPO market as the 'dumbest in history,' targeting the Lenskart public offering. He alleges artificial hype is created by anchor investors, inflating valuations and misleading retail investors. Sharma warns that this cycle traps retail investors, leading to post-listing collapses, and suggests the market is driven by irrational exuberance rather than fundamentals.
Shankar Sharma, a prominent Indian investor, has sharply criticized the current state of India's IPO (initial public offering) market, describing it as the 'dumbest in history' and specifically referencing the buzz around Lenskart's upcoming public listing. Sharma points to what he calls a 'beautiful little game' played by anchor investors—primarily large institutions—who, in his view, artificially boost the legitimacy and valuations of companies going public. This orchestrated hype, he argues, leads to inflated IPO prices that do not reflect the true value or prospects of the underlying businesses. Sharma is particularly concerned about the impact on retail investors, who he believes are misled by anchoring bias—the tendency to rely too heavily on the first piece of information offered—set by these anchor rounds. As a result, when the stocks eventually list and the initial hype subsides, prices often collapse, leaving retail investors with significant losses. Sharma's critique extends to a broader skepticism about the rationality of the Indian public markets, suggesting that current valuations are driven more by speculative fervor than by fundamental analysis. He implies that both companies and large investors are taking advantage of the market's exuberance, with retail participants repeatedly falling into the same trap. His commentary serves as a caution to investors to look beyond headline valuations and anchor-led hype, and to critically assess the fundamentals before participating in such offerings.
