After opening the day in green, share markets in India have continued the momentum and are presently trading above the dotted line. All sectoral indices are trading in green stocks in the capital goods sector and stocks in the bank sector leading the gains.

The BSE Sensex is up by 198 points (up 0.6%) and the NSE Nifty is trading up by 50 points (up 0.5%). Meanwhile, the BSE Mid Cap index is trading up by 0.6%, while the BSE Small Cap index is trading up by 1.2%. The rupee is trading at 73.88 to the US$.

In news from the IPO space. Emami Cement has filed with capital markets regulator to raise Rs 10 billion through an initial public offering (IPO).

The IPO comprises fresh issuance of shares worth Rs 5 billion, besides, an offer of sale of the same size by the company's existing promoters and shareholders, according to the draft red herring prospectus (DRHP).

The company said net proceeds raised through the issue will be used for repayment of certain indebtedness and for other general corporate purposes.

Emami Cement established an installed manufacturing capacity of 5.60 million metric tonnes per annum (MMTPA) in its two years of commercial operations.

The shares of the company will be listed on both the BSE and NSE. The company said it currently operates three manufacturing plants and is in the process of setting up another plant, which subjects to receipt of necessary approvals, is expected to result in an aggregate installed capacity of 9.30 MMTPA of cement and 3.2 MMTPA of clinker by April 2019.

Speaking of IPOs, what if one had invested in all the IPOs? How have the IPOs performed in 2017? And, have they outperformed the indices?

IPOs Underperform Broad Market Indices

According to an article in Business Standard, an investor who bet on the 33 IPOs of 2017 (on a weighted average basis) has seen the value of investment rise by 17%. However, compared to broad market indices, the underperformance is a bitter disappointment.

The above chart clearly shows the underperformance of IPOs.

What is the reason for this underperformance?

One of the key reasons IPOs have touched the altitude is due to a surge in the Indian equity market backed by liquidity and increasing investor demand for financial assets. Private equity investors and promoters took advantage of the absurd demand and came out with sky-rocket valuations. This is what we call a valuation bubble in the IPO market.

During such times, it is imperative to be critically selective when investing in IPOs. Carefully analyze each company for its own merits and don't give in to the hype surrounding the public offering.

Moving on to news from stocks in the IT sector. An IT advocacy group representing more than 1,000 small IT companies mostly run by Indian-Americans has filed a lawsuit against the US immigration agency for issuing H-1B visas for shorter than three years duration.

The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise. The technology companies depend on it to hire tens of thousands of employees each year from countries like India and China. These visas are typically issued for three to six years to employers to hire a foreign worker.

Back in February this year, the Trump administration announced a new policy that makes very tough the procedure of issuing H-1B visas to those to be employed at one or more third-party worksites.

Under the new policy, the company would have to go an extra length to prove that its H-1B employee at a third-party worksite has specific and non-qualifying speculative assignments in specialty occupation

Indian IT companies, which are among the major beneficiaries of H-1B visas, have a significant number of its employees deployed at third-party worksites.

Companies seeking H-1B visas for their employees working at a third-party site, now have an intensive paperwork to file before submitting their applications. This has added to the compliance and operational costs of India's IT companies catering to the US market.