Legendary investor Warren Buffett always tells his followers to be “fearful when others are greedy, and greedy when others are fearful.”

Indian primary market investors are repeatedly turning to these words of wisdom, as one after another initial public offering (IPO) has been witnessing eye-popping subscriptions and blockbuster debuts even when the broader market is turning weak.

Happiest Minds and Route Mobile had blockbuster debuts over the past 10 days, doubling investor wealth on listing day. This has turned investors greedy and made them rush towards new issues on offer.

The initial public offerings of Chemcon Speciality Chemicals and CAMS closed on Wednesday with strong response from investors even as the stock market weakness extended for the third straight day. Bids for Chemcon’s issue were 149 times the shares on offer, making it one of the most subscribed IPOs in five years. The Rs 2,242 crore IPO of CAMS was subscribed 46.9 times.

Market watchers have since turned wary about the prevailing greed in the IPO mart amid a correction in stocks. They are advising investors to be cautious while lapping up these IPOs.

The issue of Angel Broking, which is currently open for subscription, has been subscribed 1.46 times till the first two hours of Day 3 of the bidding process. As per data available with NSE, the issue had attracted bids for 2,00,94,459 shares, or 1.46 times the issue size of 1,37,70,491 shares.

Ambareesh Baliga, an independent analyst, said if the market continues to fall, the IPO premium is likely to disappear. He said SBI Cards was expected to be listed around Rs 1,000, but it eventually debuted at a discount due to a broader market correction.

“Investors are hopping on to the primary market bandwagon just for listing gains,” he said. “If the stock correction continues, issues of companies with weaker fundamentals may even fail to sail through,” he cautioned.

High grey market premium has created euphoria in the primary market, making it the most crowded trade.

Sandip Ginodia of Abhishek Securities, an entity that deal in unlisted shares, said there is a mismatch in demand and supply due to excess liquidity. “Investors are blindsided by grey market premium,” he said

Falling interest rates, abundant liquidity, entry of a large number of new investors and lack of alternative investment options have created the frenzy for IPOs among retail investors.

Pankaj Pandey, Head of Research at ICICIdirect, said as attraction for fixed income investment avenues drops due to falling interest rates, some volume growth is expected in parts of the equity market.

“Neither will all sectors show similar growth, and nor will all issues give similar listing pop,” he said, adding: “One should not paint the entire picture with the same brush.”

Other market watchers say global liquidity will provide a cushion to stock markets till the US elections. “That said, any deep correction or profit booking will have repercussions on the primary market as well,” they said.

Baliga said investors must look at fundamentals of the company instead of grey market premium, and realise that not every issue doubles investor money. “One should be alert ahead of a selloff in the secondary market,” he said.

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