NEW DELHI: India’s biggest wealth creator in Calendar 2019 was not precious metals, but IPOs. They were fewer in numbers, but mopped up returns with both hands.
All but two mainboard IPOs of the year cheered investors with handsome returns, even as concerns over weakness in the broader market forced 47 companies to shelve new public offerings worth Rs 51,000 crore.
Among the issues that hit the market in 2019, three delivered over 100 per cent return within days of listings. Thirteen of the 15 debutants beat Sensex’s 15 per cent return for the year. Ironically, the biggest IPO of the year proved to be biggest value destructor.
Shares of IRCTC, which got listed on October 14, zoomed 175 per cent over their issue price of Rs 320 to Rs 880.85 on BSE.
IndiaMartInterMesh surged 113 per cent to Rs 2,072 against an issue price of Rs 973. The scrip was listed on July 4.
Affle India, listed on August 8, soared 109 per cent to Rs 1,554 over its issue price of Rs 745. Polycab India jumped 79 per cent since its listing on April 16 to trade at Rs 964 on Friday. Neogen Chemicals and Metropolis Healthcare gained over 50 per cent each.
“Successful IPOs in 2019 were all from successful themes, which the secondary market already liked,” said G Chokkalingam of Equinomics Research and Advisory.
“The same situation would continue in the first half of 2020. But a possible significant outperformance of smallcap and midcap stocks in the secondary market could bring in more IPOs to the market,” he said.
Ajit Mishra of Religare Securities said there could be 40-50 mainboard IPOs in the coming year, if market conditions remain favourable.
Sterling Wilson, with a 62 per cent slide, was the worst listing of 2019. The stock fell as promoters of Sterling and Wilson Solar (SWSL),
Shapoorji Pallonji Groupand Khurshed Yazdi Daruvala, failed to honour their commitments made during the August IPO issue and sought more time from the company’s board to repay loans worth Rs 2,341 crore citing unforeseen reasons, including a liquidity crisis at the group level.
Sterling & Wilson Solar raised Rs 2,850 crore through the IPO against the year’s average issue size of Rs 773 crore, showed a study by PRIME Database.
2019's India's IPO proceeds lowest in 4 years
Revival on the cards for IPO mart?
27 Dec, 2019
Indian initial public offerings tumbled to a 4-year low by value in 2019 as the economy slowed, but some analysts are hoping for better in 2020 on the back of potential government reforms likely to boost stock markets.
What's behind the decline?
27 Dec, 2019
Financials and industrial sectors led the declines in IPO issues, with proceeds more than halving. “Because of different types of disruptions, such as corporate failures and bankruptcies, things have slowed down considerably,” Khetan said.
2019 IPO proceeds at 4-year low
27 Dec, 2019
Funds raised by Indian IPOs fell to just $2.8 billion this year, the lowest in four years, according to data from Refinitiv. In 2017, the proceeds hit a record $11.7 billion before falling to $5.5 billion in 2018. “2019 has been the worst year from an IPO market perspective,” said Sandip Khetan, a partner at consultancy EY.
IPO report card for 2019
27 Dec, 2019
Many of this year’s IPOs have performed well, boosting the outlook for more issues next year. Shares of Indian Railway Catering and Tourism Corp Ltd (INIR.NS), marketing and advertising firm Affle (India) (AFFL.NS), and e-commerce company Indiamart Intermesh (INMR.NS) have doubled in value from their issues prices. The S&P BSE IPO index. BSEIPO, which measures the performance of companies listed at the Bombay Stock Exchange after the completion of their IPOs, has surged 34% this year, outperforming broader indexes such as NSE Nifty 50 and BSE Sensex.
Corporate tax cut boosts Nifty
27 Dec, 2019
India's NSE Nifty 50 index. NSEI was down about 1.4% for the year on September 19, a day before the announcement of a cut in the corporate tax rate boosted markets and raised hopes of more reforms to help the economy. The NSE index was up 12.4% in 2019 as of Tuesday’s close. “The government has addressed a lot of economic reform requirements in the last three months,” said EY’s Khetan.
Some analysts blamed the merchant banker for faulty pricing of the IPO, but others said investors themselves are responsible if a stock cracks after listing, as they had all the information before deciding to bet on the issue.
Meanwhile, Xelpmoc Design & Tech, with a 3 per cent fall, was another debutant that failed to offer any return. This scrip is down 3 per cent over its issue price so far. KPR Agrochem withdrew its Rs 283 crore
initial public offeringa day before it was to hit the market in June.
IPO
via https://www.AiUpNow.com
December 30, 2019 at 12:38AM by , Khareem Sudlow
