Second half of 2023 flatters Indian IPO markets
In a sense the second half of 2023 is when most of the IPOs came to play a big role in the stock markets. The collections from IPOs may not still be close to the record collections we saw in 2021, but it is the number of IPOs, the subscription story and the returns post listing that are truly gratifying. The good news is that the second half of 2023 is still not over and there is one more month to go. Here are some of the highlights of the IPO market in the first 11 months of 2023.
Overall, it looks like a good year so far and the last month of December could see more big issue interest coming to the market. A key determinant of IPO markets is IPO liquidity, and that was abundant in the first 11 months. Here is a quick look at how the liquidity situation looked like.
How good was the IPO liquidity in 2023?
How do we judge IPO liquidity? One simple and effectively to judge the IPO liquidity is to look at the total subscription amount received. Here is a list of IPOs that got public interest of more than Rs50,000 crore for their IPOs.
Company |
Listing |
Issue Size |
Subscription |
Issue |
Market |
Total |
Total IPO |
Tata Technologies |
30-Nov-23 |
3,042.51 |
69.43 |
500.00 |
1,216.00 |
143.20% |
2,11,241 |
JSW Infrastructure |
03-Oct-23 |
2,800.00 |
39.36 |
119.00 |
219.55 |
84.50% |
1,10,208 |
IREDA Ltd |
29-Nov-23 |
2,150.21 |
38.80 |
32.00 |
62.70 |
95.94% |
83,428 |
Cello World Ltd |
06-Nov-23 |
1,900.00 |
41.69 |
648.00 |
795.50 |
22.76% |
79,211 |
SBFC Finance |
16-Aug-23 |
1,025.00 |
74.06 |
57.00 |
89.40 |
56.84% |
75,912 |
Mankind Pharma |
09-May-23 |
4,326.36 |
15.32 |
1,080.00 |
1,905.00 |
76.39% |
66,280 |
IdeaForge Technology |
07-Jul-23 |
567.29 |
106.06 |
672.00 |
785.00 |
16.82% |
60,167 |
Netweb Tech |
27-Jul-23 |
631.00 |
90.55 |
500.00 |
890.10 |
78.02% |
57,137 |
Jupiter Life Line |
18-Sep-23 |
869.08 |
64.80 |
735.00 |
1,100.00 |
49.66% |
56,316 |
Utkarsh SFB |
21-Jul-23 |
500.00 |
110.77 |
25.00 |
50.25 |
101.00% |
55,385 |
Data Source: NSE / BSE
There were 2 companies viz. Tata Technologies and JSW Infrastructure that saw investment interest from IPO subscribers of more than Rs1 trillion. Interestingly, all the above 10 companies where the IPOs saw buying interest of more than Rs50,000 crore came out in the second half of 2023, indicating which side of the year the IPO liquidity was robust. Let us now turn to how IPOs fared in terms of the extent of subscriptions received for the IPO.
IPOs with the best subscription levels in year 2023
Here we look at the IPOs that got the best subscription levels in the first 11 months of 2023. We are not going to look at this number in rupee terms but in subscription ratio terms. So, the companies with the best subscription ratio will figure at the top and the IPOs with the lowest subscription ratio will figure in the bottom of this list. For the same of completeness, we will look at the leaders on subscription and also the laggard IPOs on subscription basis.
Company |
Listing |
Issue Size |
Subscription |
Issue |
Market |
Total |
Total IPO |
Plaza Wires Ltd |
12-Oct-23 |
71.28 |
160.97 |
54.00 |
108.00 |
100.00% |
11,474 |
Utkarsh SFB |
21-Jul-23 |
500.00 |
110.77 |
25.00 |
50.25 |
101.00% |
55,385 |
IdeaForge Technology |
07-Jul-23 |
567.29 |
106.06 |
672.00 |
785.00 |
16.82% |
60,167 |
Aeroflex Industries |
31-Aug-23 |
351.00 |
97.11 |
108.00 |
157.60 |
45.93% |
34,086 |
Ratnaveer Precision |
11-Sep-23 |
165.03 |
93.99 |
98.00 |
117.75 |
20.15% |
15,511 |
Netweb Tech |
27-Jul-23 |
631.00 |
90.55 |
500.00 |
890.10 |
78.02% |
57,137 |
Vishnu Prakash |
05-Sep-23 |
308.88 |
87.82 |
99.00 |
204.50 |
106.57% |
27,126 |
Senco Gold |
14-Jul-23 |
405.00 |
77.25 |
317.00 |
735.00 |
131.86% |
31,286 |
ESAF SFB |
10-Nov-23 |
463.00 |
77.00 |
60.00 |
67.90 |
13.17% |
35,651 |
EMS Limited |
21-Sep-23 |
321.24 |
76.21 |
211.00 |
456.95 |
116.56% |
24,482 |
Data Source: NSE / BSE
If you look at the top 10 companies by the ratio of subscription, all of them are IPOs below Rs700 crore in size, which is not too surprising. There is a total of 3 IPOs that got subscribed more than 100 times and 3 IOPs that got subscribed between 90X and 100X. How did these top subscription names fare in terms of returns? To begin with, all have given positive returns with 5 out of these 10 IPOs more than doubling from their IPO issue price i.e., more than 100% returns.
Here it must be noted that we consider pure returns from point of listing till date and the returns are not annualized. Another way to look at these subscription numbers would be; how many of them featured in the top IPO collections. There are only 3 out of these top-10 IPOs that actually got subscription interest of more than Rs50,000 crore, so clearly the law of small base continues to apply to subscriptions. Once again, the top 10 IPOs by subscription all happened in the second half of 2023, hinting at a clear surge in liquidity in the second half of the year.
IPOs with the lowest subscription levels in year 2023
Having seen the top performers in terms of subscriptions in 2023, let us turn to the IPOs that witnessed the lowest subscription levels in the first 11 months of 2023. Once again, we will not look at this number in rupee terms but in subscription ratio terms. The order of rankings will change in this case since you will now find the bottom performers with the lowest subscription levels featured on the top.
Company |
Listing |
Issue Size |
Subscription |
Issue |
Market |
Total |
Total IPO |
Radiant Cash |
04-Jan-23 |
387.94 |
0.53 |
94.00 |
88.70 |
-5.64% |
206 |
HMA Agro Industries |
04-Jul-23 |
480.00 |
1.62 |
585.00 |
648.90 |
10.92% |
778 |
Yatra Online |
28-Sep-23 |
775.00 |
1.66 |
142.00 |
132.10 |
-6.97% |
1,287 |
Fedbank Financial |
30-Nov-23 |
1,092.26 |
2.24 |
140.00 |
142.20 |
1.57% |
2,447 |
Manoj Vaibhav Gems |
03-Oct-23 |
270.20 |
2.33 |
215.00 |
350.45 |
63.00% |
630 |
Avalon Technologies |
18-Apr-23 |
865.00 |
2.34 |
436.00 |
506.50 |
16.17% |
2,024 |
TVS Supply Chain |
23-Aug-23 |
880.00 |
2.85 |
197.00 |
206.50 |
4.82% |
2,508 |
Updater Services |
04-Oct-23 |
640.00 |
2.96 |
300.00 |
267.00 |
-11.00% |
1,894 |
Sai Silks (Kalamandir) |
27-Sep-23 |
1,201.00 |
4.47 |
222.00 |
298.15 |
34.30% |
5,368 |
Divgi TorqTransfer |
14-Mar-23 |
412.12 |
5.44 |
590.00 |
1,028.00 |
74.24% |
2,242 |
Data Source: NSE / BSE
If you look at the bottom 10 companies by the ratio of subscription, there are only 2 IPOs with size of over Rs1,000 crore. There was just one IPO of Radiant Cash that actually got undersubscribed. A total of 9 IPOs were subscribed less than 5 times, while 8 IPOs were subscribed less than 3 times in the year 2023. How did these bottom subscription names fare in terms of returns? Out of the 4 companies that have given negative returns post listing, 3 are found in this list, which clearly shows that the level of subscription does influence the returns that companies have given post listing.
Among the bottom performers, 3 were from the first half of the year while the others were from the second half of the year. In terms of IPO size, these 10 companies at the bottom of the subscription ranking accounted for just about 15% of the total IPO size and 13.6% of the total IPO collections overall.
IPOs that gave the best returns in year 2023
Here we look at the IPOs that gave the best returns in the first 11 months of 2023. We will look at the list of companies based on the percentage returns by just comparing the market price by the issue price. None of the returns here are annualized since that is an assumption that may not stand to reason quite often. Overall IPO returns have been fairly attractive in 2023 with 44 out of the 48 IPOs giving positive returns on a current basis.
Company |
Listing |
Issue Size |
Subscription |
Issue |
Market |
Total |
Total IPO |
Cyient DLM Ltd |
10-Jul-23 |
592.00 |
71.35 |
265.00 |
651.00 |
145.66% |
42,239 |
Tata Technologies |
30-Nov-23 |
3,042.51 |
69.43 |
500.00 |
1,216.00 |
143.20% |
2,11,241 |
Senco Gold |
14-Jul-23 |
405.00 |
77.25 |
317.00 |
735.00 |
131.86% |
31,286 |
EMS Limited |
21-Sep-23 |
321.24 |
76.21 |
211.00 |
456.95 |
116.56% |
24,482 |
Vishnu Prakash |
05-Sep-23 |
308.88 |
87.82 |
99.00 |
204.50 |
106.57% |
27,126 |
SignatureGlobal (India) |
27-Sep-23 |
730.00 |
12.50 |
385.00 |
780.40 |
102.70% |
9,125 |
Utkarsh SFB |
21-Jul-23 |
500.00 |
110.77 |
25.00 |
50.25 |
101.00% |
55,385 |
Plaza Wires Ltd |
12-Oct-23 |
71.28 |
160.97 |
54.00 |
108.00 |
100.00% |
11,474 |
IREDA Ltd |
29-Nov-23 |
2,150.21 |
38.80 |
32.00 |
62.70 |
95.94% |
83,428 |
JSW Infrastructure |
03-Oct-23 |
2,800.00 |
39.36 |
119.00 |
219.55 |
84.50% |
1,10,208 |
Data Source: NSE / BSE
What are the quick findings by looking at the 10 top IPOs this year on returns generated post listing? A total of 8 out of the 10 top companies by returns have given more than 100% returns with the lowest return in the top list being 84.5%. Most of the top return IPOs have been heavily subscribed with two of the 10 IPOs getting subscription of more than 100X and 7 out of the 10 IPOs getting subscription of more 60X in the IPO markets in 2023. How was the periodic classification of returns. All the 10 top performing IPOs of 2023 are from the second half of 2023 with 7 out of these 10 IPOs happening in the last 3 months. So, it is the recent IPOs that have given the best returns on a point to point basis.
Did the returns have anything to do with the size of the IPO. Once again, that does not come out too clearly. For example, 3 out of these 10 IPOs had an issue size of more than Rs2,000 crore, so returns have no size effect worth noting. In terms of IPO size, these top 10 IPOs in terms of returns accounted for 25% of the issue size overall in 2023 so investors in big IPOs have made money overall. Cyient DLM, Tata Technologies and Senco Gold were the top performers in terms of shareholder returns post listing. In terms of total customer response, the total subscription interest of these top 10 performers was around 42% of the total subscription interest in 2023. That means, there would be a lot of non-allotment disappointment as this also represents the opportunity cost of not getting allotment.
IPOs that gave the lowest returns in year 2023
Here we look at the IPOs that gave the lowest returns in the first 11 months of 2023. We will look at the list of companies based on the percentage returns by just comparing the market price by the issue price. None of the returns here are annualized since that is an assumption that may not stand to reason quite often. If you look at the list of 10 worst performers in terms of post-listing returns; there 4 companies giving negative returns and 6 companies giving less than 2% returns since listing.
Company |
Listing |
Issue Size |
Subscription |
Issue |
Market |
Total |
Total IPO |
Updater Services |
04-Oct-23 |
640.00 |
2.96 |
300.00 |
267.00 |
-11.00% |
1,894 |
Yatra Online |
28-Sep-23 |
775.00 |
1.66 |
142.00 |
132.10 |
-6.97% |
1,287 |
Radiant Cash Management |
04-Jan-23 |
387.94 |
0.53 |
94.00 |
88.70 |
-5.64% |
206 |
IRM Energy Ltd |
26-Oct-23 |
545.04 |
27.05 |
505.00 |
486.25 |
-3.71% |
14,743 |
Blue Jet Healthcare |
01-Nov-23 |
840.27 |
7.95 |
346.00 |
348.50 |
0.72% |
6,680 |
Fedbank Financial |
30-Nov-23 |
1,092.26 |
2.24 |
140.00 |
142.20 |
1.57% |
2,447 |
TVS Supply Chain |
23-Aug-23 |
880.00 |
2.85 |
197.00 |
206.50 |
4.82% |
2,508 |
ASK Automotive |
15-Nov-23 |
834.00 |
51.14 |
282.00 |
296.00 |
4.96% |
42,651 |
Udayshivakumar Infra |
03-Apr-23 |
66.00 |
32.49 |
35.00 |
37.50 |
7.14% |
2,144 |
HMA Agro Industries |
04-Jul-23 |
480.00 |
1.62 |
585.00 |
648.90 |
10.92% |
778 |
Data Source: NSE / BSE
What are the quick findings by looking at the 10 top IPOs this year on returns generated post listing? The best returns were 10.92% and the rest of the companies in the list have offered single digit returns. How do these bottom performers pan out in terms of the timing of the issue. Only 2 of the 10 laggards were from the first half of 2023 while the remaining 8 were from the second half of the year. There is just one issue in this list with an IPO size of more than Rs1,000 crore with the rest is less Rs1,000 crore. The bottom 10 IPOs by returns accounted for 15% of the total IPO size and hence the impact would not be too much.
In the bottom returns list, there are only 3 companies that got double digit subscription with the other 7 companies got just single digit subscriptions. In terms of overall subscription collections for the IPO, only 3 companies response of more than Rs6,000 crore. In this year, there appears to be direct correlation between the extent of subscription and the price performance of the IPO. The top performers of 2023 are the companies are the ones that showed robust subscription levels during the IPO. They have given the best returns post listing. If you look at the top 20 players with the best returns post listing, only 2 companies had single digit subscription levels with the remaining 20 players getting subscription in double digits.
Final thoughts on the India IPO story for 2023
Let us answer a very important question. How did IPOs perform as an asset class? That is a generic question but for that we can look at a hypothetical portfolio of IPOs with equal allocation to all the IPOs in the market, without making any specific choice. How would the returns for the investor have been. If an investor had put in equal sums of money in all the 48 IPOs during the year 2023 so far, then portfolio returns would have been an attractive 55.78%. That means IPOs in 2023 raised Rs44,159 crore and generated value of Rs24,632 crore on these IPOs. Which were the IPOs that generated most of this value?
Seven out of the 48 companies generated more than Rs1,000 crore in value for investors overall. These 7 companies generated Rs15,494 crore in value. That means the top 7 companies created 63% of the total value to IPO holders while the remaining 41 IPOs created only 37% of the total IPO value in the market. Year 2023 has been a robust year for IPOs; not only in terms of returns and subscriptions, but also in terms of the emergence of IPOs as a distinct asset class, all over again!
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