IPO rush: five of seven offerings in 2021 delivered positive returns
Over 10 companies are set to hit D-Street with its public offerings.
2021 is a busy year for investment bankers, as the first two months alone saw seven companies listing on the bourses. Indian Railway Finance Corporation, Indigo Paints, Home First Finance, Stove Kraft, Brookfield India Real Estate Trust, Nureca & RailTel Corporation cumulative raised around Rs 12,095 crore through initial public offerings. Investors rushed to fill these IPOs as all of them were oversubscribed.
Here is how all the seven IPOs have performed so far:
Mayuresh Joshi, Head of Equity Research of William O’Neil said, “in the primary market, a lot of people missed out and the market kept moving higher and higher without participation. So, people started looking at the secondary market therefore the subscription figure that you see was an obvious effect in terms of a lot of retail investors & HNI investor is applying into the secondary route & lot of IPOs actually did well.”
Indigo Paints gave stellar returns to investors as Rs 15,000 invested in its IPO has turned into Rs 25,386 in just 20 sessions garnering a return of 69%. Experts on the street are very optimistic about Indigo’s long term growth prospects as the fundamentals of the company are very strong.
Nureca also gave stupendous returns as Rs 15,000 invested in the companies IPO is now Rs 26,250 appreciating by 75%. Hemant Jani of Sharekhan is of the opinion that Nureca is in a niche segment offering health-related product through online platform can witness good growth in the long run. The market size is very big, whereas the company is relatively new. So, it can grow at a very high rate. So, a lot of people can participate in the opportunity.
Stove Kraft listing also delivered good returns of 30% turning Rs 15,000 into Rs 19,486 in just 15 trading sessions. However, analysts have raised concerns on sustainable business growth going ahead and cut-throat competition in all the segments of kitchen appliance by segment leaders.
While RailTel Corporation of India gave decent returns to investors as Rs 15,000 grown to Rs 19,372 gaining 29%. Keshav Lahoti of Angel Broking is of the opinion that investors should stay invested in the company. There is a good upside as the company has a terrific story in digital transformation & the broadband business’s growth prospects looks interesting.
Affordable housing finance company Home First Finance which debut on the bourses on 3rd February lost much of listing gains as most analysts suggested to book listing gains. Rs 15,000 invested in this companies IPO is up marginally to Rs 15,568.
Brookfield India Real Estate Trust REIT made a flat market debut on February 16, listing at Rs 275.05 on the BSE against the issue price of Rs 275. However, the REITs lost around 9% in the last 9 trading sessions.
The first NBFC from the PSU sector, Indian Railway Finance Corporation (IRFC) is trading at over 5% from its issue price and Rs 15,000 invested in this stock is marginally lower to Rs 14,221. Monarch Networth Capital believes the stock can double from here to Rs 50. “Businesses with characteristics of superior asset growth, limited NPA, and healthy capital position, tend to trade at higher valuations as investors gauge greater confidence in earnings growth. Valuation multiplies in such a situation could well trade at a significant premium to its historical multiplies. We see a possibility of the same in the case of IRFC in the medium-longer term perspective,” it said in a report.
There are many more IPOs lined up in March namely MTAR Technologies, Kalyan Jewellers, Suryoday Small Finance Bank, Nazara Technologies, Aadhar Housing Finance, Anupam Rasayan, Laxmi Organic Industries, Apeejay Surendra Park Hotels, Puranik Builders, Barbeque Nation Hospitality and Easy Trip Planners.