24 IPOs raised Rs 38,961 crore in first half of 2021; Four deliver negative returns
19 of the 24 IPOs delivered positive returns at the end of H1CY21. With gains of around 300% Nureca was the biggest wealth creator
The first half of 2021 was the busiest for primary markets, merchant bankers, registrar and others as India recorded 24 initial public offers (IPOs) raising Rs 38,961 crore, while in CY20, 16 companies raised Rs 31,128 crore through IPOs. Fundraising via IPOs in H1CY21 (first half of calendar year 2021) was highest in over a decade thanks to flood of funds from FIIs, DIIs and unprecedented participation from retail investors as well.
In H1 2021, Powergrid Infrastructure Investment Trust was the largest with an issue size of Rs 7,734.99 crore. Followed by Sona BLW Precision Forgings raising Rs 5,550 crore and Indian Railway Finance Corporation garnered Rs 4,633.38 crore were among the top three IPOs of H1CY21 based on the issue size.
On the subscription front six IPOs MTAR Technologies, Nazara Technologies, Easy Trip Planners, Shyam Metalics, Indigo Paints and Laxmi Organic Industries saw robust response from investors as they were subscribed over 100 times.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the performance of the IPO market usually has a strong correlation to the performance of the secondary market.
“If the stock market is bullish, it attracts a large number of investors into IPOs. Particularly, new investors lured by high potential profits, get attracted to new offers and the IPO market has always done well during market booms,” added Vijayakumar.
Top performers
19 of the 24 IPOs delivered positive returns at the end of H1CY21. With gains of around 300% Nureca was the biggest wealth creator as it ended at Rs 1,593 compared to issue price of Rs 400 apiece. Likewise Easy Trip Planners (up 111%), MTAR Technologies (up 97%), Stove Kraft (up 90%), Barbeque-Nation Hospitality (up 77%), Laxmi Organic Industries (up 70%), Indigo Paints (up 69%) and Railtel Corporation Of India (up 50%) were among the top gainers of H1CY21.
While issues like Macrotech Developers, Nazara Technologies, Anupam Rasayan India, Dodla Dairy, Shyam Metalics & Energy, Craftsman Automation, Sona BLW Precision Forgings, Krishna Institute of Medical Sciences, Powergrid Infrastructure Investment Trust, Heranba Industries and Home First Finance Company India rose anywhere between 5-40%.
Losers
4 issues in H1CY21 eroded investors wealth. Suryoday Small Finance Bank was the top wealth destructor as its share price crashed to Rs 221.95 compared to the issue price of Rs 305. Similarly, investors of Kalyan Jewellers IPO slipped 10%, while the state-run Indian Railway Finance Corporation is quoting 4% lower to its issue price and Brookfield India Real Estate Trust REIT was marginally lower by 2.5%.
Upcoming IPOs
More than a dozen insurance, asset management, commercial banking, non-banks, microfinance, housing finance and payment bank players already filing draft documents with the market regulator SEBI for public offerings, the financial services sector is set to dominate the primary issues or initial public offerings (IPOs) over the coming months.
Some of those who have already filed the draft red herring prospectus (DRHPs) with the SEBI include Aadhar Housing Finance (Rs 7,500 crore), Policy Bazaar (Rs 4,000 crore), Aptus Housing Finance (Rs 3,000 crore), Star Health Insurance (Rs 2,000 crore), Arohan Financial Services (Rs 1,800 crore), Fusion Microfinance (Rs 1,700 crore), Fincare Small Finance Bank (Rs 1,330 crore), Tamilnad Mercantile Bank (Rs 1,000-1,300 crore), Medi Assist (Rs 840 crore) and Jana Small Finance Bank (Rs 700 crore), among others. The board of the biggest payments bank Paytm has reportedly cleared an over Rs 22,000 crore IPO making it largest in the country.