Beating odds! Half of 2022 D-Street debutants trading above issue prices

However, if deep dive, the performance of debutants of 2022 has been impressive.

Between January-June 2022, as many as 16 companies made their debut on the bourses with half of them trading below their issue prices, whereas the second half delivering positive response with two multibaggers.

Abhay Agarwal, smallcase manager, founder and MD, Piper Serica Advisors, said that the markets have struggled to form a bottom in the first half faced by multiple head winds.

“We believe that markets are trying to form a bottom now, but we will see big inflows only if at least a couple of these issues are resolved in a concrete manner,” he added.

Rajesh singla, CEO, Planify Capital said that benchmark indices and secondary markets have been too volatile in the first half thanks to geopolitical worries, rising inflation and monetary tightening by the central banks.

The 16 listings in the current calendar so far have raised close Rs 40,950 crore through their initial stake sales, with an average return of 11.25 per cent on a year-to-date (YTD) basis till June 28.

However, if the FPO of Baba Ramdev led

is added to the list, the total fund raise zooms to Rs 45,250 crore and the average return improves to 14.6 per cent on YTD basis so far.

Vijay Singhania, Chairman, TradeSmart said that poor listing gains and performance of most of the new age companies, resulted in a reluctance on part of companies and merchant bankers to approach the primary market.

“The poor performance of

post its listing also put pressure on primary markets, resulting in fewer companies approaching the markets to raise funds,” he added.

In the current context also, there are many interesting IPOs which are expected to compound wealth in the long term. Active management of the IPO basket is crucial, he added.

As many as two stocks have delivered multibagger returns so far. The list includes

(158 per cent up) and (100 per cent up) from their respective issue prices till June 28, 2022.

Vedant Fashions, Campus Activewear, Aether Industries and

have also delivered double digit returns to the investors since their listing over the given issue prices.

Among the wealth destroyers,

have tanked about 60 per cent from its issue price of Rs 175. State-run (LIC) is also 30 per cent down from its issue price.

Uma Exports (25 per cent down), Prudent Corporate Advisory Services (25 per cent down) and Rainbow Children’s Medicare (25 per cent down) are other top wealth destroyers.

Factors including stock market volatility, price correction in overvalued stocks, growing concerns about a rise in commodity and energy prices too have dented the IPO performance, said Palka Arora Chopra, Senior Vice President, mastertrust.

Largest issue in the history of the domestic primary markets, LIC, was launched during the period. LIC raised more than Rs 21,000 crore, whereas Uma Exports was the smallest issue raising only Rs 60 crore.

Seven companies raised more than Rs 1,000 crore through their issues. It includes Delhivery (Rs 5,235 crore), Adani Wilmar (3,600 crore),

(Rs 3,149 crore), Rainbow Children’s (Rs 1,581 crore), Paradeep Phosphates (Rs 1,501 crore) and Campus Activewear (Rs 1,400 crore).

May was the most active month for the IPO markets as half of the issue. Eight companies were listed between May 9-30, whereas April saw three listings. February and June had two listings each and the remaining one was in January.

Investors should not engage in panic selling at present and should accumulate high-quality shares as that can provide them with a strong return in the near future, suggested Singla from Planify.

Market experts believe that despite near-term headwinds, investors can expect there to be a strong pipeline for IPOs in the second half of the calendar year.

There are a number of companies in the pipeline to float their primary offerings. This includes companies like One Mobikwik Solutions, Sterlite Power Technologies, ESDS Software Solutions, Go Air, Bajaj Energy, Aadhar Housing, Oyo, BoAt and others.

The second half of the year will depend to a large extent on the performance of the secondary markets, said Singhania from TradeSmart. “High inflations, aggressive rate hikes and no resolution to the war would keep primary markets under pressure.”

Several IPO launches were postponed due to market uncertainty, said Chopra from mastertrust. “It remains challenging for companies to determine the right timing and alternative strategies that provide access to funding for further growth.”

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)