Why are share prices of recently listed Groww, PhysicsWallah and Tenneco Clean Air stocks falling?

Shares of Groww, PhysicsWallah and Tenneco Clean Air hit the news for the impressive listing gains it gave for the IPO subscribers. However, soon after, these stocks are again in the news. But this time for bleeding red. 

 

What's causing the fall in share price?

All three stocks were listed on NSE as well as on BSE with tremendous listing gains. Stocks of Groww were listed at 12 per cent premium, PhysicsWallah at 33 per cent and Tenneco Clean Air at 27 per cent premium. 

 

As per analysts, profit booking, high valuations and market volatility are among some of the reasons behind the fall in the prices of these stocks. 

 

In the case of Groww and PhysicsWallah, once listed, the stocks gave more than 40 per cent gains, which triggered the investors to book profits, which led to a market correction and selling pressure. High valuations of these stocks were also being observed by the market experts. 

 

Experts noticed that extremely low free float, in the case of Groww, triiggered the stock to be susceptible to a 'short squeeze'. Why did this happen? Only 7 per cent of Groww's shares were available for trading initially. Due to this, short-sellers were forced to buy shares at higher prices, which became a reason for the rally in the share price. This was followed by a sharp correction after the buzz cooled down. Valuation concerns too are clogging the minds of investors. 

 

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