IPOs generated exceptional returns of 57% in 2021

The year 2021 has turned out to be the best year for the Indian primary market. As many as 64 motherboard companies have raised around 1.2 lakh crore through Initial Public Offerings (IPOs), the highest amount raised through public issues in a single calendar year.

Many of these IPOs have yielded outsized returns while a few have disappointed. Overall, investors made a lot of money investing in IPOs in 2021.

If an investor had invested 10,000 in each of the 64 IPOs, the present value of their investment would be 10,008,076 versus an investment value of 6,40,000. This translates to a 57.5% gain over motherboard IPOs in 2021.

Various sectors

From new age internet companies like Paytm, Zomato and Nykaa to traditional healthcare companies, insurers and diagnostics players like Policybazaar, Star Health Insurance and Glenmark Life Sciences and many others from a wide range of industries have tapped into the capital market to make the most of the investor euphoria.

But not all IPOs have attracted the interest of sophisticated Indian investors. 19 of 64 IPOs, including India’s largest public offering – the 18,300 crore sale of Paytm shares – were listed at a discount. As the Aditya Birla Sun Life AMC show opened flat.

Additionally, not all stocks captured investor interest after listing. As of December 31, only 36 companies were reigning well above their respective IPO prices, while the remaining 28 were trading in the negative zone.

Free returns

The investment in healthcare provider Nureca’s IPO reportedly offered the highest return, with the company’s share price surging 400% to 1,998 yen from the issue price of 400 yen Friday. Likewise, the stock prices of MTAR Technologies (328%), Paras Defense & Space Technologies (324%), Laxmi Organic Industries (232%), Easy Trip Planners (188%) and LatentView Analytics (185%) have all experienced a significant jump compared to their issue price.

Destructors of wealth

On the other hand, the investment in the Suryoday Small Finance Bank IPO reportedly wiped out more than 50 percent of the money invested as the stock closed at 145 in the BSE on Friday against the price. issue of 305. Likewise, shares of CarTrade Tech, Windlas Biotech, One 97 Communications (Paytm), Fino Payments Bank and SJS Enterprises were found to be the biggest destroyers of wealth, whose shares traded at a discount of 29-48% per share. compared to their respective issue price.

With significant listing gains in some IPOs, many investors started investing in the primary market only with the intention of returning on listing day. Sigachi Industries recorded a maximum gain when it first entered the market, offering a 270% quotation gain to investors. Likewise, shares of Paras Defense & Space Technologies (185%), LatentView Analytics (148%), Tatva Chintan Pharma Chem (113%), Indigo Paints (109%) and GR Infraprojects (109%) all offered a exceptional gain to investors on the day of their listing.

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