9 mins read . 04 Jan 2023
To begin with, the IPO action in 2022 was nowhere close to the impressive action in the year 2021. If the year 2021 saw nearly Rs. 130,000 crores collected through IPOs, it was just about 64,500 crores in the full year 2022. There were a total of 40 IPOs that closed in the year 2022, including the last IPO of Radiant Cash Management, which will list on the bourses only next year.
Here are some key takeaways from the IPOs of 2022.
It was a tough year, but amidst the uncertainty, the IPO market did show a lot of resilience.
Let us now turn to the best and worst-performing IPOs of the year 2022 based on post-listing returns. For simplicity, we will not get into annualizing returns and just look at the absolute returns from point to point.
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 Activewear | 28-Apr | 1,400.00 | 51.75 | 292.00 | 412.80 | 41.37% |
Data Source: NSE (CMP as of close of 30th December 2022)
During the year, there were 3 IPOs that delivered above 100% returns viz. Adani Wilmar, Hariom Pipes and Venus Pipes. However, the positive takeaway is that the top 10 IPOs have all given positive returns of over 40%, purely on a point-to-point basis. Let us turn to losers.
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 Guard | 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)
During the year, there were 6 IPOs that fell more than 25% with AGS Transact being the worst performer falling 63.6% from the IPO price levels. Two of the biggest IPOs of the year viz. LIC of India and Delhivery Ltd are in the bottom 5 performers of the year, something that has dented overall IPO returns and IPO sentiments to a large extent in the year.
What was the driver of outperformance or underperformance? Was it at the level of subscription and did a good level of oversubscription automatically assure investors of a strong post-listing performance? Here are some interesting observations.
What is the takeaway? As the last point underlines, the subscription does matter, but only up to a point. Beyond that, it is about how much the stock leaves on the table. Just to underline this point, Five Star Business Finance was undersubscribed with just 70% absorption, but the stock has given 31% returns since listing.
Intuitively one would be inclined to believe so since two of the biggest IPOs of 2022 viz LIC of India and Delhivery are among the bottom five performers of 2022. However, that is not exactly the reflective trend. For instance, the top performer Adani Wilmar with 168% returns was not a small IPO with a size of Rs3,600 crore. That is not all.
Among the top 10 IPO performers of the year, 4 IPOs had an issue size of over Rs1,000 crore, so they would classify as large IPOs. On the other hand, if you look at the bottom performers, barring LIC and Delhivery, the other 8 IPOs were all less than Rs800 crore. So the interpretation that size matters to returns is more intuitive than logical.
If you look at it quantitatively, 24 out of the 40 IPOs or 60% of the IPOs have given positive returns. Also, the subscription to the IPOs overall stands at over 9.7 times indicating that there is still a lot of appetite for the IPOs. But, let’s ask a more pertinent question; what would have happened if the investor had just allocated equal amounts to all IPOs?
On an overall investment, he would have earned 13.82% at a portfolio level. That is not bad in a highly volatile market and considering that LIC and Delhivery would have destroyed a good deal of returns. If the investor had skipped LIC and Delhivery, the IPO portfolio returns would have nearly doubled to 25.46%. But that is wishful thinking. What matters is that IPOs as an asset class is still able to yield returns for investors. That is the good news!
Mutual Fund
6 mins read . 13 Nov 2023
Avoid the pitfalls: why buying low NAV funds is not a strategy
Read moreDemat Account
9 mins read . 10 Nov 2023
Muhurat Trading 2023: A Guide to Auspicious Stock Market Beginnings
Read moreMutual Fund
13 mins read . 06 Nov 2023
Debt and Hybrid Funds performance for October 2023
Read moreShare Market