Investor Behaviour Analysis (2015–2025): IPO Flippers, Portfolio Managers, and Long-Term Unlisted Investors

Data gathered from the study conducted by SEBI 2024 reports and other databases reveals a critical market paradox as it signals that majority of the 12 to 13 crore Indian Retail investors lack the expertise in managing their portfolio and rather chase the short term listing gains that has delivered only 8.41% average return while the Old class the long term investors has saw a CAGR of 13 % to 14% and 26% to 28% for the long term investors in unlisted market. This widening gulf between the Traders of the moment is slowly and gradually reshaping the Indian equity markets and the investment psychology.

1. IPO Flippers — The Speculators of the New Age

The most common and the newbie investors who are just investing for the sake of Fear of Missing Out (FOMO), the listing opportunities without little or less fundamental knowledge of the company or the industry. SEBI 2024’s report suggests that out of 144 IPO, they found that over half of the retail investors, 50.2% sell their IPO allotted shares within a week of listing.

This dictates the behavioural trap, i.e., when an IPO gains 20%+ 67%+ of the retail investors exit within a week, locking in small profits or when an IPO turns to discount pricing, only 23% exit, others hoping for a rebound that rarely comes.

2. Active Portfolio Managers: The One in the Middle

The one who sits in between but has the correct instincts and insights. Not entering into hype as it will be completely unorthodox for their community, but based on financial, comparative analysis, and based on data research.

On average, their investment horizon stands at 12 months minimum, in contrast to the 4-5 day investment horizon of the flippers. They understand that real value emerges from earnings, not euphoria. Mutual funds, the most disciplined among them, hold 85% of IPO allocations beyond one year.

3. Unlisted Market Traders – the Silent Wealth Builders

In financial Slang, they are referred to as what we call Visionaries. Invest before the IPO listing, when the valuations are still grounded and risk-adjusted returns are asymmetric.

Unlisted long-term investors maintain a 72%-win rate, the highest among all categories[code execution data]. This elevated success rate reflects multiple factors:

• Entry at earlier stages provides a margin of safety before the market discovers the business
• Longer holding periods allow underlying business quality to compound
• Founders and VCs providing pre-IPO funding create alignment of interests
• Regulatory oversight and disclosure requirements increase as listing approaches, reducing surprise downside

Let’s recall the famous NSE case. These visionaries discovered the NSE at ₹740, and even CSK before it was recognised as a sports business empire. Many quietly accumulated OYO, PharmEasy, Groww, and Studds Accessories shares years before the public even knew they could.

Don’t believe the glorified talks? Let’s see the numbers of what the unlisted market patience pays:

NSE Share Price: 30.8% CAGR (₹740 → ₹1,775 in 3 years)

OYO Share Price: 26% CAGR (₹17.25 → ₹27.5 in 2 years)

CSK Share Price: 47% CAGR (₹40→ ₹190 in 4 years)

Retail Investor Explosion vs Portfolio Management Gap: Most New Investors Lack an Active Strategy

The gap chart above shows that 75% of retail investors in 2025 lack active portfolio management practices. These 9 crore untrained investors generate 54% of weekly flipping activity, creating market volatility that sophisticated investors exploit.

Any possibilities of reversal in this trend?

While the current established research on Indian retail investors points towards young investors primarily under 30 years of age engaging in high-frequency trading, i.e., Options trading, despite lacking the basic fundamental knowledge. Nearly 50% of the demat accounts opened between 2021 and 2023 were for the purpose of exploiting quick returns in the options trading market, which is just another delusional metric in the financial industry. And applied in the IPO listing gains based on word of mouth, their friends did, so they did it.

Without conviction rooted in analysis, these investors cannot psychologically withstand volatility. When a position drops 10% intraday, fear overrides commitment, triggering panic selling. Conversely, when a position gains 15% in hours, greed overrides patience, triggering exit. Even that is what Tuhin Kanta Pandey, SEBI Chief, said during the talks with the press late week of October 2025.

However, reversal is not guaranteed. A prolonged bull market without corrections could reinforce speculation, while social media amplification of "quick wealth" narratives could offset education efforts. The key determining factor will be whether experiential learning (market corrections) combines with institutional education faster than social media misinformation spreads.

The implication is clear: those who adopt unlisted market psychology and long-term fundamental investing today will position themselves ahead of the behavioural curve, capturing the 28-30% CAGR returns available to patient capital while the majority still chase 8.41% listing gains. The reversal creates a multi-year arbitrage opportunity for disciplined investors willing to think and act differently from the crowd.

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