That was when the euphoria had fizzled out in the primary market after a memorable year 2020-21, which saw 30 firms raise over Rs 31,275 crore.
Out of these 30 companies, 13 have delivered over 100 per cent return since listing. The list featured Route Mobiles, Happiest Minds and Technologies, Nureca, Burger King India, Likhitha Infra, Rossari Biotech and Angel Broking. All of them are still trading at a 100 per cent premium to their listing prices.
“Improved secondary market sentiment triggered higher activities in the primary market during FY21. Promoters rushed to go public. The recent spate of successful IPOs indicates investors’ appetite for midcap and smallcap firms,” said Neeraj Chadawar, Head – Quantitative Equity Research, Axis Securities.
However, a couple of companies such as Suryoday Small Finance Bank and Kalyan Jewellers have failed to hold up. Five debutant stocks today trade at discounts to their issue prices. The other three included
, Home First Finance and Antony Waste Handling. The latter two had been listed at a premium.
The year turned out to be rewarding for IPO investors. Three companies – Chemcon Speciality Chemical, Happiest Minds Tech and Route Mobiles – doubled prices on debut.
Every third company that made an entry on the mainboard delivered over 50 per cent listing gains. They included Burger King, MTAR Technologies, Nazara Technologies, Indigo Paints, Mrs. Bectors Food, Nureca and Rossari Biotech.
“Listing gains contributes to good IPO market sentiment. Smaller-size issues may give robust listing gains, but they are equally prone to triggering wealth erosion if market sentiments turn sour,” said
V Jayasankar, Senior Executive Director & Head (ECM), Kotak Mahindra Capital.
Even big-size issues like Gland Pharma (Rs 6,480 crore) Computer Age Management Services (Rs 2,244.33 crore) and Indigo Paints (Rs 1,176 crore) have rewarded investors handsomely.
Indigo Paints had surged 125 per cent from its issue price of Rs 1,490 to Rs 3,348, but today trades at Rs 2,607, a 63 per cent premium to listing price. Gland Pharma and Computer Age Management Services have doubled since listing.
Investors, who did not get the share allotment in initial offerings, had decent opportunities to board the train later on. Likhitha Infra, Angel Broking, Nureca, Happiest Minds and Route Mobiles have doubled prices since listing. The former two had made a subdued debut on Dalal Street, but grew by leaps and bounds in recent weeks.
Equitas Small Finance Bank (up 81 per cent), Anupam Rasayan (up 41 per cent) and UTI Asset Management (up 39 per cent), too, have surged after listing at a discount.
“A few issues were listed during the volatile market phases, leading to muted listing gains. When the market understood the resilience of the business model, it resulted in better performance post listing,” said Chadawar of Axis Securities. “Poor listing of good companies tend to draw investors, who have a long-term view on a stock or sector. ”
But five debutant stocks have retreated over 20 per cent since listing. Chemcon Speciality Chemicals delivered up to 120 per cent return in the first few weeks, but now trades at Rs 451, a 38 per cent discount to listing price.
Antony Waste (down 30 per cent), Heranba Industries (down 22 per cent), Mrs Bectors Food (down 21 per cent) and Home First Finance (down 20 per cent) are now available below listing price, even after healthy listing.
“The current market environment is conducive for the primary market, and the IPO market should stay active this calendar year,” said Chadwar. “Investors need to tap the primary market opportunity not only for listing gains but also to pick solid long-term bets.”
