In the first half of FY24’s IPO season, there were no major offerings, but investors reaped better rewards. Retail applications reached ₹55,516 crore, a substantial 118% increase over the total IPO mobilization.
Experts predict that the IPO market will remain active for the next 4-5 months before a temporary pause due to the upcoming elections. This fiscal year has witnessed a continuous flow of new public offerings, with fewer mega IPOs compared to the previous year. Instead, many companies opted for smaller capital raises, ultimately delivering attractive returns for investors.
With only four exceptions, nearly every IPO listed this fiscal year provided positive listing gains. Moreover, out of the 29 IPOs listed, only seven had single-digit listing gains, while the rest delivered double-digit returns.
Notably, a few stocks like Ideaforge, Aeroflex Industries, and Netweb Technologies almost doubled investors’ money on their listing day. Primedatabase reports that 27 out of 28 IPOs (excluding Updater) are currently trading above their issue prices.
In terms of listing gains, the first half of FY24 outperformed the previous year significantly, with an average listing gain of 29.44%, compared to 11.56% in the first half of FY23, according to Primedatabase.
However, there were a few recent exceptions like Updater Services, Yatra Online, Zaggle Prepaid Services, and Avalon Technologies, which experienced listing declines.
Company Listing Gains
- Updater Services: -5.3%
- JSW Infrastructure: 20%
- Manoj Vaibhav Gems ‘N’ Jewellers: 0%
- Sai Silks (Kalamandir): 4%
- Signatureglobal India: 16%
- Yatra Online: -8%
- Zaggle Prepaid Ocean: -1%
- Samhi Hotels: 4%
- R R Kabel: 14%
- EMS Ltd: 33%
- Jupiter Life Line Hospitals: 31%
- Ratnaveer Precision Engineering: 31%
- Rishabh Instruments: 4%
- Vishnu Prakash R Punglia: 65%
- Aeroflex Industries: 83%
- Pyramid Technoplast: 11%
- TVS Supply Chain Solutions: 5%
- Concord Biotech: 21%
- SBFC Finance: 44%
- Yatharth Hospital & Trauma Care Services: 1%
- Netweb Technologies: 89%
- Utkarsh Small Finance Bank: 60%
- Senco Gold: 36%
- Cyient DLM: 51%
- IdeaForge Technology: 94%
- HMA Agro Industries: 5%
- IKIO Lighting: 37%
- Mankind Pharma: 20%
- Avalon Technologies: -1% (Source: Axis Capital)
The enthusiasm from retail investors was evident during the IPO frenzy, especially in August and September when 21 IPOs were launched. Remarkably, there was no sign of investor fatigue. Pranav Haldea, Managing Director of Prime Database Group, attributed this robust IPO response to strong listing performances.
Nine recently launched IPOs received oversubscriptions of over 50 times, while ten others were oversubscribed by more than 10 times. Retail investor participation significantly increased compared to the first half of FY22-23, with an average of 10.02 lakh applications, up from 7.57 lakh in the previous year.
Mahavir Lunawat, Managing Director of Pantomath Capital Advisors, noted that the Indian capital market’s depth and the increasing participation of domestic investors in IPOs were evident in the overwhelming subscription levels for IPOs like Aeroflex Industries and Vishnu Prakash R Punglia.
The total value of shares applied for by retail investors reached ₹55,516 crore, marking a substantial 118% increase over the total IPO mobilization, compared to a 33% decrease in the previous year.
Some SEBI reforms, such as reducing the listing time from T+6 days to T+3 days, have contributed to expediting retail investments and enhancing sector efficiency, according to Lunawat.
The IPO momentum is set to continue, with 31 Indian companies raising ₹26,300 crore through main board IPOs in the first half of FY23-24, as reported by Primedatabase. Excluding LIC’s mega IPO, IPO mobilization grew by an impressive 76% compared to the previous year.
More IPOs are on the horizon, with 28 companies planning to raise ₹38,000 crore with SEBI approvals already in hand, while another 41 are awaiting the regulator’s approval to raise approximately ₹44,000 crore.
Lunawat expressed optimism about the robust IPO pipeline, particularly from small and midsize businesses in Tier II and Tier III regions, which are poised to reshape the capital market dynamics and contribute significantly to India’s economic growth.