Out of the 6 mega IPOs worth at least Rs 10,000 crore seen on Dalal Street so far, 5 of them gave negative returns on listing. Not just that, IPO investors who have held on to the stock in hopes of a turnaround are still sitting on losses, according to data from Prime Database.
LIC IPO in May 2022, which was subscribed 2 times, resulted in a 8% loss on listing day. Paytm’s Rs 18,300 crore IPO, which was also the biggest issue that time, lost over 27% of its value on listing day. Even now, Paytm IPO investors are sitting at massive losses.
General Insurance Corporation’s Rs 11,257 crore IPO resulted in 4.5% loss on listing in October 2017. IPO investors are yet to recover their money.
Similarly, SBI Cards and Reliance Power IPOs – both above Rs 10,000 crore – turned out to be wealth destroyers.
Coal India’s Rs 15,199 crore IPO is the only exception in this list which gave a healthy profit of about 40% on listing day and was trading around 96% higher from its offer price.Among other big IPOs, The New India Assurance Co’s Rs 9,586 crore issue also lost 9% of its value on listing day in November 2017. The stock was trading around 49% below its IPO offer price.Out of the top 10 largest IPOs in India’s history, 6 of them gave negative returns on listing day and 7 of them had the loser tag even a year after listing.
Will history repeat with Hyundai IPO?
As Hyundai IPO opens for subscription from Tuesday, at least 12 brokerages have issued subscribe ratings given steady growth prospects amid industry tailwinds, robust financials & healthy SUV product slate.
“We expect limited listing gains to this IPO, however expect HMIL to deliver healthy double-digit portfolio returns over medium to long term,” ICICI Direct analyst Shashank Kanodia said.
If we attribute FY25 annualized super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 26.73, and based on FY24 earnings, the P/E stands at 26.28.
“The issue relatively appears fully priced, but the company is poised for bright prospects post completion of its ongoing expansions,” Bajaj Broking said.
While large IPOs typically signal market peaks, as was seen after the IPOs of Paytm and LIC, but this the market has already witnessed a correction.
“Exuberance and euphoria normally lead to a market top. Fortunately, the recent correction has applied some brakes to the euphoric drive of this bull market. The markets seem ready to absorb the supply of paper from the biggest-ever IPO in Indian capital markets history,” said Jimeet Modi of Samco Securities.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Source link
