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IPO PERFORMANCE IN INDIA

7 Mins 09 May 2023 0 COMMENT

INTRODUCTION

Which were the most successful IPOs in India in the year 2022? IPO performance cannot be looked at in terms of returns alone, but also in terms of oversubscription and sustained returns. To understand the recent IPO performance of Indian IPOs, we look at the IPO performance 2022 to get a quick full year picture.

Year 2022 was nowhere close to the impressive IPO performance of 2021. While year 2021 saw Rs130,000 crore collected through IPOs, it was just Rs64,500 crore in 2022. Let us turn to the key highlights of the IPO story for 2022.

STAND OUT FEATURES OF THE IPO STORY IN 2022

Here are key takeaways from IPO 2022 story.

a)  In 2022, a total of 40 IPOs hit the IPO market in the year. Out of the 40 IPOs of the year 2022, a total of 24 IPOs gave positive returns as of December 2022 and 16 IPOs gave negative returns. Most of the negative return IPOs were concentrated Q4.

b) Total IPO collections for 2022 were at Rs64,694 crore, with applications of Rs626,428 crore received. The big daddy of the year was the LIC IPO worth Rs21,008 crore. The other big IPOs of the year were Delhivery and Adani Wilmar.

IPO LEADERS AND LAGGARDS OF 2022

Let us turn to the best and worst performing IPOs of 2022 based on post-listing returns. These are just raw returns and not annualized returns.

 

Company

Name

Issue Close

Issue Size (Rs. Crore)

Subscription (X)

Issue Price (Rs.)

CMP (Rs.)

Returns (%)

Adani Wilmar

31-Jan

3,600.00

17.37

230.00

617.45

168.46%

Hariom Pipes

05-Apr

130.05

7.93

153.00

358.50

134.31%

Venus Pipes

13-May

165.42

16.31

326.00

715.00

119.33%

Ruchi Soya

28-Mar

4,300.00

3.60

650.00

1,190.00

83.08%

Veranda Learning

31-Mar

200.00

3.53

137.00

246.60

80.00%

Prudent Corporate

12-May

538.61

1.22

630.00

993.00

57.62%

Vedant Fashion

08-Feb

3,149.19

2.57

866.00

1,332.50

53.87%

Electronics Mart

07-Oct

500.00

71.93

59.00

86.35

46.36%

Bikaji Foods

07-Nov

881.22

26.67

300.00

437.90

45.97%

Campus Active

28-Apr

1,400.00

51.75

292.00

412.80

41.37%

Data Source: NSE (CMP as of close of 30th December 2022)

It was not roses all the way, so let us also look at the major IPO losers for the year 2022. Here again we just look at raw returns and not annualized returns.

Company

Name

Issue Close

Issue Size (Rs. Crore)

Subscription (X)

Issue Price (Rs.)

CMP (Rs.)

Returns (%)

Elin Electronics

22-Dec

475.00

3.09

247.00

229.25

-7.19%

Landmark Cars

15-Dec

552.00

3.06

506.00

462.00

-8.70%

Keystone Realtors

16-Nov

635.00

2.01

541.00

493.55

-8.77%

Dharmaj Crop

30-Nov

251.15

35.49

237.00

199.75

-15.72%

Inox Green Energy

15-Nov

740.00

1.55

65.00

47.85

-26.38%

LIC of India

09-May

21,008.48

2.95

949.00

684.65

-27.86%

Abans Holdings

15-Dec

345.60

1.10

270.00

189.40

-29.85%

Uma Exports

30-Mar

60.00

7.67

68.00

47.65

-29.93%

Delhivery Ltd

13-May

5,235.00

1.63

487.00

330.70

-32.09%

AGS Transact

21-Jan

680.00

7.79

175.00

63.70

-63.60%

Data Source: NSE (CMP as of close of 30th December 2022)

As can be seen from the above two tables, there were 3 IPOs in the year giving more than 100% returns while a total of 6 IPOs fell more than 25%.

IPO PERFORMANCE: SUBSCRIPTION VERSUS SIZE

What was the driver of outperformance or underperformance of the IPOs? Was it  the level of subscription or was it size. Here are some takeaways.

  • Among the top 10 in terms of IPO returns, only Electronics Mart and Campus Active were subscribed over 50 times. Five out of the top-10 performers were subscribed less than 10 times.
  • AGS Transact, the worst performing IPO got 7.79 times subscribed. Again, Dharmaj Crop was subscribed 35.5 times but is 15.7% below IPO price. So there is nothing conclusive about size or subscription influencing IPO returns.

Remember, the top performer of the year was the third largest IPO by size, so it is not like size also matters. It is largely about quality of the IPO and how much they leave on the table for the investors.

WAS IT REALLY A HAPPY 2022 FOR IPO INVESTORS?

Here are some interesting statistics. Firstly, 24 out of the 40 IPOs gave positive returns i.e. 60% success rate, which is not bad. Overall subscription to IPOs was 9.7 times indicating good appetite. If investors had just passively allocated to all IPOs in 2022, they would have earned 13.82% returns, which is not bad. There is too much concern over LIC and Delhivery. The reality is that IPO as an asset class is still able to yield optimized returns for the IPO investors. That is the good news!

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