Lessons from the most expensive IPOs of 2007 and 2010

History is a great teacher, only to those who want to learn from it. When we look back to see the fate of some of the most expensive IPOs of the bull run that ended in January 2008, we find a common motif. Lofty valuations do not hold up for very long. Take a look at the four graphics below. These are some of the most expensive IPOs of recent times. These consist of diverse companies in unrelated industries. None of them were able to hold onto their high valuations for long. Keep in mind that these are not IPOs that have lost the most investor wealth. These are just the most expensively valued ones at the time of their listing. The IPO of Religare Enterprises, a financial-services firm, in 2007 was subscribed 160 times. The retail portion was subscribed 90 times. The stock listed at a 75 per cent premium and traded at 155 times earnings. So far, the company has not made any profit in four of the last five years. Investors in this issue have lost 90 per cent of their investments. Firstsource Solutions, sold as the country's first pure-play BPO listing and backed by none other than ICICI Bank, was subscribed 50 times and listed at a PE of 137 times. Today, it has lost half of its investors' money. Suryachakra Power Corporation saw listing gains of 50 per cent and