In the last three years, the Indian capital market has seen a strong surge in initial public offering (IPO) activity and emerged as a bright spot in the world in terms of new public offerings. As many as 143 Indian companies from multiple sectors raised ₹2.27 lakh crore through main board IPOs between 2021-23, 18% higher than the ₹1.92 lakh crore mobilised by 194 corporates in the last one decade (2011-2020).
In 2021, 63 companies garnered ₹1.18 lakh crore via IPO, while 40 firms went public in 2022 after raising ₹59,300 crore. So far this year, 57 main board IPOs listed on stock exchanges as of December 21, mopping more than ₹49,000 crore, as per data from Prime Database.
The euphoria in the primary market is far from over as companies are lined up to raise around ₹63,000 crore through IPO in 2024. As many as 27 companies have received nod from the capital market regulator SEBI to launch their IPOs worth around ₹29,000 crore, while 29 other corporates are awaiting green signal to hit Dalal Street, looking to raise nearly ₹34,000 crore collectively.
The boom in the primary market can be attributed to strong rally in the Indian equities, while good valuations, better pricing, and strong listing performance also prompted promoters and private companies to take the IPO route.
As per the latest exchange data, out of 57 main board IPOs listed so far this year (till December 21), barring 4 companies, most of them have given positive returns over the issue price, indicating buoyancy in the equity market. In the backdrop of strong rally in the equity market, with both Sensex and Nifty surging nearly 17% in the calendar year, as well as growing investor appetites for IPOs, some of the issues created record in terms of number of applications and subscription.
Tata Technologies, the first IPO listing from Tata Group in nearly two decades, created a record of attracting the highest number of applications on its issue, surpassing the likes of LIC of India, Reliance Power, Glenmark Life Sciences, SBI Life Insurance, Zomato, Nykaa, among others. With 73.58 lakh applications, Tata Tech smashed the record of 73.38 lakh applications of LIC of India, the country’s biggest-ever IPO after Paytm, which came in May 2022.
In terms of subscription, Jaipur-based jewellery retailer Motisons Jewellers topped the chart, with its ₹151 crore issue receiving 173.23 times bids. The portion reserved for qualified institutional buyers (QIB) was booked 135.01 times, while portions for non-institutional investors (NIIs) and retail investors were subscribed 311.99 times and 135.6 times, respectively.
Plaza Wires, which raised ₹71.28 crore in one of the smallest IPO of the year, also garnered overwhelming response from all categories of investors, with the issue subscribing nearly 161 times. Among others, Utkarsh Small Finance Bank, ideaForge Technology, DOMS Industries also received strong response for their IPOs, with their issues subscribing 100.77 times, 106.06 times, and 99.34 times, respectively.
Top performers
State-owned Indian Renewable Energy Development Agency (IREDA) has emerged as the top performer, delivering 243% returns against its issue price of ₹32. The Miniratna company debuted on stock exchanges on November 29, 2023, after receiving an overwhelming response for its ₹2,150-crore IPO, which was the first PSU to list on stock exchanges after a long gap of 17 months post LIC's market debut in May 2022.
Electronics manufacturing services and solutions provider Cyient DLM, which raised ₹592-crore via IPO, is another outstanding performer, which has risen 147% against its issue price of ₹265 since its listing on July 10.
Tata Technologies also had a stellar run at the bourses after making a blockbuster debut on the stock exchanges on November 30. A subsidiary of Tata Motors, the company has surged 142% in fifteen trading session, from its IPO price of ₹500 per share.
Among others, Netweb Technologies, a high-end computing solutions provider, has risen 136% against its IPO price of ₹500 apiece, while jewellery retailer Senco Gold has given 128% returns against its issue price of ₹317 per share.
Worst Performers
City gas distribution company IRM Energy, which raised ₹545.40 crore at a price band of ₹480-505, is the worst performing IPO in terms of returns. After making a weak debut on October 26, the Caila Pharma-backed stock has given a negative return of 20% against its IPO price.
Cash logistics player Radiant Cash Management, which received cold shoulder from investors for its ₹256.66 crore IPO, has also failed to impress D-Street. The company, a market leader in retail cash management services for banks, financial institutions, has given a negative return of 5.5% over IPO price since its listing on January 4, 2023.
Among others, Yatra Online, the country's third-largest online travel company that mopped ₹775 crore via IPO, has given a negative return of 4.35% against its issue price. While auto ancillary firm ASK Automotive, which made a positive debut on November 15 after raising ₹834 crore through IPO route, has delivered a negative return of 1.4%.
TVS Supply Chain Solutions, a part of TVS Mobility Group, has also failed to grab investor attention as it has given a flat return of 1.4% since its listing on August 23. The ₹880 crore IPO of the supply chain management company was booked 2.78 times, which were offered at a price band of ₹187-197 per share.
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