New Delhi: Similar to the secondary market, Samvat 2078 has also been a mixed bag for the primary markets. A number of IPOs launched during the period brought mixed returns for investors.
A handful of switches have turned out to be multi-baggers since their listing on the stock exchanges, while others have turned out to be asset destroyers. The trend remained positive, however, as 30 out of 41 IPOs through Oct. 20 increased investor wealth.
According to data from AceEquity, more than 40 companies were listed on the main exchange during Samvat 2078, raising more than Rs 90,340 crore. This study excludes the FPO of Patanjali Foods, formerly known as Ruchi Soya.
IPO markets have been volatile for quite some time due to mixed global and domestic signals, leading to a global liquidity squeeze.
No fewer than five companies in Samvat 2078 through Oct. 20 delivered returns of more than 100%, with a further seven rising between 50% and 95%. However, about half a dozen stocks lost more than a third of their value.
Among the winners was the best performing debutant in Samvat 2078. Adani Group’s FMCG arm is up some 203% above its Rs.230 issue price to hit Rs.695.95 on Thursday 20th October (147% in the Plus), Data Patterns (up 132%), Venus Pipes & Tubes (up 123%) and Campus Activewear (up 117%) were other IPOs that became multipackers in the ongoing Samvat.
Go Fashion (India),
Metro Brands, Electronics Mart India and have gained between 55 and 95% since listing.
On the other hand,
and (Paytm) fell 70% and 67%, respectively. and each fell about 55%. , and each fell 30-40% from their list prices during the period.
The mix of IPOs included giant issues such as Life Insurance Corporation of India (LIC) which floated the largest issue ever in the Indian market valued at Rs 20,550 crore, followed by One97 Communications’ issue valued at Rs 18,300 crore.
(Rs 6,400 crore) and FB Fintech (Rs 5,952 crore) were among other mega themes. Interestingly, all issues raising more than Rs 5,000 crore provided investors with negative returns.
Aastha Jain, senior research analyst at Hem Securities, said that despite the loss-making deals, the new-age internet companies, or service aggregators, have sailed through and delivered strong listing bangs despite the high liquidity.
“As interest rates drained liquidity from the markets, fundamentals and valuations once again prevailed,” she added. “The trend will remain unchanged in the short term.”
All new age internet companies including Paytm, Fino Payments Bank, FB Fintech, Delhivery and FSN E-Commerce (Nykaa) provided investors with negative returns.
Smaller issues such as Sigachi Industries, HP Adhesives, Hariom Pipe Industries, Venus Pipes & Tubes and Veranda Learning, which ranged in issue sizes from Rs 125-200 crore, provided investors with 50-150% returns.
Jain said that the small issue size and small ticket size of the price range are the key factors guiding the market at present. “Primary markets will remain buoyant in the coming Samvat under the normal circumstances in the market.”
Going forward, the market will focus on companies with stable cash flows, stronger balance sheets and transparent earnings, Abhishek Jain said
.
The IPO market will focus on companies with India as the manufacturing theme for Samvat 2079, he said, adding that consumption can also be seen as another theme to play in the IPO markets. Bharat FIH, JSW cement, NSE and NCDEX are key topics for Samvat 2079, he said.
(Disclaimer: Experts’ recommendations, suggestions, views and opinions are their own. These do not represent the views of Economic Times)
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