IPOs are being offered by companies that wants the money from the company for their project. People those who are interested in the project of the company or those people who have confidence in the management of the company would subscribe for the shares that is being offered according to their will.
If the IPO is subscribed fully then we can say, people has confidence in that particular company. If it is oversubscribed, then it shows the interest of the investors in that company. If it under subscribed then it shows there lack of faith in that company.
Investors’ interests in investing in IPOs are affected by the various factors. One of the biggest and most influential factor is sentiment in the secondary Markets. If the sentiment is bullish, the IPO will subscribe fully, if not it will flop in the IPO Market.
In any market, the sentiment would be bullish only during Bull Markets. So IPOs will be successful only during the course of the Bull Market or in the end of the bull market. But in Bull markets, the IPOs are priced highly. In bear markets how much ever good project will be bombarded in the IPO market.
But as an investor it is always best to invest during Bear Markets. Simply it is good because it will be priced lowly.