Here is the macro picture. A total of 53 IPOs (including 1 REIT and 1 INVIT) collected a total of Rs.114,653cr so far in year 2021. We have excluded the Star Health IPO as it opens in November but closes in December. The IPOs of Tarsons and Go Fashion are yet to list, so we have used the GMP as a proxy for analysis purposes. Here is the IPO 2021 story.
|Company Name||Issue Close||Issue Size (Rs. Crore)||Subscription (X)||Issue Price (Rs.)||CMP (Rs.)||Returns (%)|
|Home First Finance||25-Jan||1,173.72||26.66||518||802.00||54.83%|
|Stove Kraft Ltd||28-Jan||412.63||18.03||385||984.95||155.83%|
|Easy Trip Planners||10-Mar||510.00||159.33||187||527.70||182.19%|
|Laxmi Organic Industries||17-Mar||600.00||106.81||130||430.00||230.77%|
|Sona BLW Precision||16-Jun||5,550.00||2.28||291||743.00||155.33%|
|Clean Science & Tech||09-Jul||1,546.62||93.41||900||2,125.00||136.11%|
|Aptus Value Housing||12-Aug||2,780.05||17.2||353||331.90||-5.98%|
|Aditya BSL AMC||01-Oct||2,768.26||5.25||712||597.20||-16.12%|
|Go Fashion India||22-Nov||1,013.61||135.46||690||1,090.00||57.97%|
The biggest IPO of 2021 was obviously Paytm, which collected Rs18,300cr. However, the subscription for Paytm, was just about 1.89 times. This contrasts with the Rs9,375cr Zomato IPO which was subscribed 38 times and the Rs5,352cr IPO of Nykaa that was subscribed 81.78 times. The outcome was visible in their listing performance. While Zomato and Nykaa had a stellar listing, Paytm had a relatively disappointing listing.
Out of the 53 IPOs in year 2021 so far, 7 IPOs had a size of more than Rs5,000cr. A total of 28 IPOs (more than 50% of the CY2021 total) were above Rs.1,000 crore. In terms of subscription, 14 out of the 53 IPOs in CY2021 got subscribed more than 100 times while nearly half of the IPOs were subscribed more than 30 times. A total of 18 IPOs could muster just single-digit subscriptions during the year.
If you had to look at the underlying theme, it was all about digital IPOs. Out of the 53 IPOs in 2021, 6 digital IPOs (EasyTrip, CarTrade, Zomato, Nykaa, Policybazaar and Paytm) collected Rs42,160cr between them accounting for 37% of the total IPO collections in the year. While EasyTrip, Nykaa and Zomato have performed extremely well, the performance of Policybazaar has been in the positive but Paytm and CarTrade disappointed on listing.
Was listing performance linked to oversubscription?
This can be a double edged story. If you look at the 14 IPOs in 2021 that were subscribed over 100 times, all of them are quoting above their issue price. However, the returns range from 8.79% in the case of Shyam Metalics to 309.46% in case of Paras Defence. However, if you look at the 26 companies subscribed more than 30 times, there are two companies viz. Krsnaa Diagnostics and Glenmark Life that are quoting at a discount to issue price.
We now move to the 18 IPOs that got single-digit subscriptions. Here 50% of these IPOs are quoting below their issue price. However, Sona BLW, Macrotech and Barbeque Nation have given over 100% returns, despite single-digit subscription The moral of the story is; higher subscriptions have helped, but is not the only condition for post-listing performance.
How did IPOs as an asset class perform in 2021?
Out of the 53 IPOs in CY2021 so far, 39 IPOs gave positive returns while 14 IPOs generated negative returns with Suryoday SFB being the worst performer and Paras Defence being the star performer. Would a passive strategy of investing in IPO as an asset class have helped?
Had you invested equal amounts in all the 53 IPOs passively, then IPOs as an asset class would have generated returns of 38.06% on the IPO portfolio. That is certainly better than most asset classes in the current year!