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regular-article-logo Wednesday, 29 May 2024

Year 2023 an outlier for primary market investors as IPOs roll out 45 per cent returns

The average listing gain for all the 59 IPOs is 26.3 per cent and their average gain as of December 29 is 45 per cent and only four of the 59 main-board IPOs are traded below the issue price on December 29

Our Bureau And PTI Mumbai Published 01.01.24, 08:27 AM
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IPO investors laughed all the way to the bank as 55 of the 59 issues gave them handsome returns of 45 per cent on average.

Year 2023 turned out to be an outlier for primary market investors when 59 companies hit the street, raising Rs 54,000 crore, and returned over 45 per cent more than the issue prices on average.

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This means that more than two-thirds of companies outperformed benchmark indices which rallied close to 20 per cent in the year.

The average listing gain for all the 59 IPOs is 26.3 per cent and their average gain as of December 29 is 45 per cent and only four of the 59 main-board IPOs are traded below the issue price on December 29.

As much as 23 of the 59 issues rallied more than 50 per cent since listing and of them, nine gave more than two-fold gains over the issue price.

The best performer is little-known Indian Renewable Energy Development Agency (Irdea) with a 221.3 per cent gain over the listing price of Rs 32 on the listing day on November 29.Irdea has given a 204 per cent return as of December 29.

It is followed by Cyient DLM and Netweb Technologies with 154.5 per cent (over the Rs 265 issue price) and 140.7 per cent returns over the issue price of Rs 500, respectively.

Tata Technologies, which was an FPO, is the second-best performer on the listing day with a threefold jump over the issue price of Rs 500 and is still up over 136 per cent. Realty player Signature Global has given 128 per cent over the listing price of Rs 385.

Such a listing spree also made Dalal Street the second best in the world in the year after China with 240 issues worth over $60 billion in fund raising.

Analysts say strong macroeconomic fundamentals, political stability, optimistic corporate earnings outlook, signals from the US Federal Reserve about three prospective rate cuts next year and heavy retail investors participation played a major role in fuelling the stock market rally in the year.

The year saw 27 million investors entering the market. The BSE IPO index gained 41 per cent this year.

The record market activity — 59 main-board issues and 182 SME issues — in percentage terms means the total number of IPOs jumped 55.8 per cent on-year in 2023, the highest in the world.

PTI

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