Most people pay attention to the price per share of the stock at the time of the initial public offering (IPO). Thereafter they check the price of the share when the stock is listed at the stock exchange. Though in most cases, the price of the share jumps up after it is listed, the opposite may also happen during the volatile times.

A case in point is the fall in price of the share of the Reliance Power from its 450 rupee at the time of the IPO to far lower level when it was listed a few days after the IPO was fully subscribed.

Though the situation was redeemed by Anil Ambani by offering three bonus shares for every five allotted, this cannot happen in every case of IPO if its price falls steeply immediately after it is listed. This turbulence in the stock market was the main reason why numerous IPO s, slated to be made after the Reliance Power, were withdrawn.

The same predicament occurred in case of the new fund offerings (NFO). The investors in the mutual funds had to contend with the fall in the net asset value –NAV— of their portfolio due to the tough times.

Investors in mutual funds can benefit from the fact that the equity oriented funds invest in the stocks of various companies whose share prices may or may not fall by the same level. But as it happened recently, the NAVs of almost all the mutual funds fell down drastically.

In case of mutual funds as also equities, some shrewd investors had invested in high value funds or stocks. They, therefore,   had already benefited by the rise of the NAVs of the funds or the share prices of the stocks they had invested in. They did not suffer high losses as the NAVs of their funds or the share prices of their stocks fell to the price level at which they had bought them.

In view of the unpredictability of the share market, what matters most is that you should do a thorough research and invest in high value stocks and mutual funds. Even though their prices too may fall during the bear reign, the chances of their speedy price recovery always remain high.