IPO collections cross ₹1.1 Trillion in 2024; courtesy Hyundai India

24 Oct 2024 , 09:26 AM

A QUICK LOOK AT IPO STORY IN CALENDAR 2024

The year 2024 still has more than 2 months to go and some real big ticket IPOs yet to open. However, thanks to the largest IPO in Indian history (Hyundai Motor India), total IPO collections from IPOs in 2024 have already crossed ₹1.1 Trillion. There has seen some solid action in the IPO markets with a number of mega-sized issues sailing through in the current calendar year. As of the third week of October 2024, if we only consider the mainboard IPOs of 2024 that have already listed, there have been a total of 66 IPOs. Here is a quick of summary of the IPO action in India in the year 2024 till date.

• A total of 66 IPOs in the year 2024 (up to October 23, 2024) have collected a total sum of ₹1,13,147 Crore on the IPO mainboard. For a more comprehensive picture, we have also included the follow-on public offer (FPO) of Vodafone and the issue of Bharat INVIT too. Out of the 66 IPOs so far; there were 21 IPOs in the March quarter, 15 IPOs in the June quarter, 26 IPOs in September quarter and just 4 IPOs in the December quarter so far.
• While the intent of these IPOs was to collect ₹1,13,147 Crore from the public, the actual investor interest received for these IPOs (inclusive of oversubscription) was to the tune of ₹32,00,885 Crore. That effectively translates into an overall subscription of 28.29 times for all the mainboard IPOs in aggregate. SME IPOs are not included here.
• Out of the 66 IPOs that have already listed in the year 2024, a total of 49 IPOs have given positive returns while 17 IPOs have given negative returns. The negative return names have been in sectors like small finance banks, retail stores, and hospitality. The top performers for the year, so far, was Jyoti CNC Automation (+211.8%), followed by Diffusion Engineers (+162.3%), Platinum Industries (+157.0%), and Bharti Hexacom (+155.3%). These are raw point-to-point returns and have not been annualized.
• Out of the 49 IPOs that have given positive returns in 2024, a total of 6 IPOs gave more than 100% returns, 21 IPOs gave more than 50% returns, while a total of 36 IPOs gave more than 25% returns. Had an investor invested in all the 66 IPOs in 2024 and got an allotment of one lot each, their return on investment would have been an impressive 23.79%. This figure has fallen sharply since last month, largely due to the sharp FPI sell-off in recent weeks and the tepid listing performance of Hyundai Motor India Ltd.
• It was a year of big issues. There were a total of 6 IPOs raising above ₹4,000 Crore, including the ₹27,870 Crore Hyundai Motor India IPO and the ₹18,000 Crore Vodafone Idea FPO. Two other IPOs viz., Bajaj Housing Finance and Ola Electric Mobility raised more than ₹6,000 Crore. A total of 21 IPOs raised more than ₹1,000 Crore in the year 2024 so far.
• In terms of subscription, the 66 IPOs put together got an aggregate oversubscription of 28.29 times, of which a total of 19 IPOs got subscribed more than 100 times and a robust 37 IPOs got subscribed over 50 times.

In the last couple of years, the Indian IPO market has gradually transitioned into T+3 (listing from IPO closure) and that has led to more liquidity churn in the markets. However, there is one more subtle shift. The IPO market in India has shown the ability to absorb several mega issues at the same time without breaking sweat.

BEST IPOS BY TOTAL RETURNS IN 2024

Here are the 20 best IPOs of the year 2024 based on total returns on the IPO post listing. These are absolute point-to-point returns, and not adjusted for holding period.

Issuer Company	Listing Date	Issue Size (₹ in Crore)	Subscription Ratio (X)	Issue Price (₹)	Market Price (₹) #	Absolute Returns (%)
Jyoti CNC Automation Ltd	16-Jan-24	1,000.00	40.49	331	1,032.15	211.83%
Diffusion Engineers Ltd	04-Oct-24	158.00	114.50	168	440.72	162.33%
Platinum Industries Ltd	05-Mar-24	235.32	98.99	171	439.50	157.02%
Bharti Hexacom Ltd	12-Apr-24	4,275.00	29.88	570	1,455.00	155.26%
Exicom Tele-Systems Ltd	05-May-24	429.00	133.56	142	317.65	123.70%
Premier Energies Limited	03-Sep-24	2,830.40	75.00	450	999.90	122.20%
KRN Heat Exchanger	03-Oct-24	341.95	213.41	220	434.10	97.32%
Bajaj Housing Finance Ltd	05-Sep-24	6,560.00	67.43	70	136.95	95.64%
EPACK Durable Ltd	30-Jan-24	640.05	16.79	230	428.50	86.30%
Awfis Space Solutions Ltd	30-May-24	598.93	108.17	383	707.00	84.60%
Unicommerce eSolutions Ltd	13-Aug-24	276.57	168.35	108	197.50	82.87%
Interarch Building Products Ltd	26-Aug-24	600.29	93.79	900	1,638.00	82.00%
TBO Tek Ltd	15-May-24	1,550.81	86.69	920	1,608.00	74.78%
Gala Precision Engineering Ltd	09-Sep-24	167.93	201.41	529	919.55	73.83%
JG Chemicals Ltd	13-Mar-24	251.19	28.52	221	383.60	73.57%
Vibhor Steel Tubes Ltd	20-Feb-24	72.17	320.05	151	251.50	66.56%
Le Travenues Technology Ltd	18-Jun-24	740.10	98.10	93	149.85	61.13%
Bansal Wire Industries Ltd	10-Jul-24	745.00	62.76	256	407.00	58.98%
JNK India Ltd	30-Apr-24	649.47	28.46	415	650.00	56.63%
BLS E-Services Ltd	06-Feb-24	310.91	162.38	135	208.50	54.44%

Data Source: NSE (# – Closing Price on 23-Oct)

Based on the table above, ranking the IPOs on the basis of percentage returns post listing, here are some of the key inferences.

• A passive approach to investing in all the 66 IPOs would have yielded return on investment (ROI) of 23.79%. This is sharply down over last month, yet attractive in absolute terms. This is assuming that you got allotment of at least 1 lot in each of the IPOs. That surely positions IPOs in the year 2024 as one of the most attractive asset classes. However, the rapid shift in IPO returns between September and October also underlines why investors continue to take a myopic to IPO investing.
• How did the return averages look like? For simplicity, we will consider only arithmetic returns to avoid the large company impact. The top 10 companies by returns generated average point-to-point returns of 129.6%, while the top 20 companies by returns gave average returns of 99.05%. That is a 30.3% probability of doubling your returns in the IPO. The probability of earning 75.6% returns on IPOs was exactly 50%. However, had you been unlucky and selected the 20 worst IPOs, you would have been far from pleased, with average returns of -14.32%. The losers have got accentuated in the last one month, since we reported these numbers in September.
• How did the top return companies fare in subscription percentage and what was the linkage? The top 10 companies had average subscription of 89.82 times while the bottom 10 by returns had average subscription of 39.92 times. So, there was a linkage between subscription ratio and returns, although even the bottom 10 have been reasonably well subscribed. In the top 10 companies by returns there were 3 companies with below average subscription and in the bottom 10, there were 2 companies with above average subscriptions. However, that could just about be the exceptions to the rule. Generally, there appears to be a correlation between subscriptions and returns.

There is one drawback when we rank by returns; and that is the small company effect. The returns ranking could be biased in favour of smaller stocks and smaller IPOs since the momentum for listing returns is much simpler. Another way to look at this listing performance is in terms of the rupee wealth created by the IPOs post-listing. This may be biased in favour of larger IPOs, but it does give a balanced perspective of stocks where a large number of people actually shared the gains. It is about rupee wealth created.

BEST IPOS BY RUPEE WEALTH CREATED IN 2024

Here are the 20 best IPOs of the year 2024 based on total rupee wealth created by these IPOs post listing. Rupee wealth is the market cap over the IPO value. These are rupee wealth numbers and could be more suggestive of retail gains made in the IPO post listing.

Issuer Company	Listing Date	IPO Size (₹ in Crore)	Subscription Ratio (X)	Issue Price (₹)	Absolute Returns (%)	Wealth (₹ in Crore)
Bharti Hexacom Ltd	12-Apr-24	4,275.00	29.88	570	155.26%	6,638
Bajaj Housing Finance Ltd	05-Sep-24	6,560.00	67.43	70	95.64%	6,274
Premier Energies Limited	03-Sep-24	2,830.40	75.00	450	122.20%	3,459
Jyoti CNC Automation Ltd	16-Jan-24	1,000.00	40.49	331	211.83%	2,118
Brainbees Solutions Ltd	13-Aug-24	4,193.73	12.22	465	35.27%	1,479
TBO Tek Ltd	15-May-24	1,550.81	86.69	920	74.78%	1,160
Aadhar Housing Finance Ltd	15-May-24	3,000.00	26.76	315	33.37%	1,001
Indegene Ltd	13-May-24	1,841.76	70.30	452	49.10%	904
Go Digit General Insurance Ltd	23-May-24	2,614.65	9.60	272	27.78%	726
Emcure Pharmaceuticals Ltd	10-Jul-24	1,952.03	67.87	1,008	37.05%	723
Akums Drugs and Pharmaceuticals	06-Aug-24	1,856.74	63.44	679	30.63%	569
EPACK Durable Ltd	30-Jan-24	640.05	16.79	230	86.30%	552
Exicom Tele-Systems Ltd	05-May-24	429.00	133.56	142	123.70%	531
Medi Assist Healthcare Services Ltd	23-Jan-24	1,171.58	16.25	418	44.98%	527
Awfis Space Solutions Ltd	30-May-24	598.93	108.17	383	84.60%	507
Interarch Building Products Ltd	26-Aug-24	600.29	93.79	900	82.00%	492
P N Gadgil Jewellers Ltd	17-Sep-24	1,100.00	59.41	480	44.18%	486
Ola Electric Mobility Ltd	09-Aug-24	6,145.56	4.45	76	7.64%	470
Le Travenues Technology Ltd	18-Jun-24	740.10	98.10	93	61.13%	452
Bansal Wire Industries Ltd	10-Jul-24	745.00	62.76	256	58.98%	439

Data Source: NSE (Based on Closing Price on 23-Oct)

Based on the table above, ranking the IPOs on the basis of wealth created post-listing, here are the key inferences.

• Against the overall issue size of ₹1,13,147 Crore, the total wealth created was to the tune ₹26,920 Crore. Out of this total wealth created. The top 5 companies created market wealth to the tune of ₹19,968 Crore or 74% of the overall wealth. The top 10 companies created market wealth to the tune of ₹24,482 Crore or 91% of the total wealth created. That means, these top 10 companies accounted for the bulk of the spread of returns. The returns were led by Bharti Hexacom generating ₹6,638 Crore and Bajaj Housing Finance generating ₹6,274 Crore.
• How did the top wealth creators fare in terms of percentage returns on investment. If you look at the top 10 wealth creators, the average returns were to the tune of 84.23%. If you look at the top 20 by wealth created, the average returns were 73.32%. That means, the big wealth creators not only led in rupee wealth created, but also in percentage returns generated. This is critical because these are the IPOs where the interest was high, retail participation was high, allotment ratios were in between and that ensured much better wealth creation for the shareholders.
• The attractiveness of an IPO is not just in the returns or wealth created but also the chances of getting an allotment. If you look at the top 5 by wealth created, the average subscription ratio was 45.00 times while for the top 10 stocks by wealth created it was 48.62 times. So, chances for retail participation in wealth creation were fairly high.

Till now we have looked at stocks from the perspective of returns. However, the brokers, issuers and financiers also look at another perspective, which is the subscription ratio. That is a barometer of the interest level in the stock; across retail, HNI / NII, and QIBs. One can always argue that the proof of the pudding lies in the eating, and that is also substantially correct. However, returns do not capture the investor appetite across retail, HNI / NII, and the QIB segments. That is captured by the subscription ratio. Also, returns are mostly notional while subscription numbers are real.

BEST IPOS BY SUBSCRIPTION RATIO IN 2024

Here are the 20 best IPOs of the year 2024 based on the subscription ratio. This is purely the ratio of the total subscriptions received to the issue size. The subscription presented here is the aggregate of retail, HNI / NII, and the QIB subscriptions. Issue size is immaterial here.

Issuer Company	Listing Date	Issue Size (₹ in Crore)	Subscription Ratio (X)	Issue Price (₹)	Market Price (₹) #	Absolute Returns (%)
Vibhor Steel Tubes Ltd	20-Feb-24	72.17	320.05	151	251.50	66.56%
Manba Finance Ltd	30-Sep-24	150.84	224.05	120	161.45	34.54%
KRN Heat Exchanger	03-Oct-24	341.95	213.41	220	434.10	97.32%
Gala Precision Engineering Ltd	09-Sep-24	167.93	201.41	529	919.55	73.83%
Unicommerce eSolutions Ltd	13-Aug-24	276.57	168.35	108	197.50	82.87%
BLS E-Services Ltd	06-Feb-24	310.91	162.38	135	208.50	54.44%
Orient Technologies Ltd	28-Aug-24	214.76	154.84	206	293.45	42.45%
Mukka Proteins Ltd	07-Mar-24	224.00	136.99	28	43.05	53.75%
Exicom Tele-Systems Ltd	05-May-24	429.00	133.56	142	317.65	123.70%
Vraj Iron and Steel Ltd	03-Jul-24	171.00	126.36	207	226.85	9.59%
Shree Tirupati Balajee Agro Trading	12-Sep-24	169.65	124.74	83	71.50	-13.86%
Kronox Lab Sciences Ltd	10-Jun-24	130.15	117.25	136	164.30	20.81%
Northern Arc Capital	24-Sep-24	777.00	117.19	263	243.10	-7.57%
Diffusion Engineers Ltd	04-Oct-24	158.00	114.50	168	440.72	162.33%
Arkade Developers Ltd	24-Sep-24	410.00	113.49	128	141.79	10.77%
Nova AgriTech Ltd	31-Jan-24	143.81	113.21	41	60.45	47.44%
Awfis Space Solutions Ltd	30-May-24	598.93	108.17	383	707.00	84.60%
Saraswati Saree Depot Ltd	20-Aug-24	160.01	107.39	160	125.40	-21.63%
DEE Development Engineers Ltd	26-Jun-24	418.01	103.03	203	240.70	18.57%
Platinum Industries Ltd	05-Mar-24	235.32	98.99	171	439.50	157.02%

Data Source: NSE (# – Closing Price on 23-Oct)

Based on the table above, ranking the IPOs on the basis of subscription ratio, here are the key inferences.

• Out of the total IPO size of ₹1,13,147 Crore, total subscription interest received was to the tune of ₹32,00,885 Crore. That translates into an overall subscription ratio of 28.29 times for all the 66 IPOs put together. This shows the total subscription appetite for IPOs, which was to the tune of $380 Billion, which is substantial appetite in the IPO market with a little over 2 months still to go for the full year to be completed.
• The ranking by subscription was biased in favour of the smaller IPOs. For instance, if you look at the average IPO size of the top 5 ranked by subscription ratio, it was just ₹202 Crore. The top 10 by subscription ratio had an average issue size of ₹236 Crore while the top 20 had an average IPO issue size of ₹278 Crore. Interestingly, the average size of the 66 IPOs in 2024 was ₹1,714 Crore so clearly, this is favouring the smaller IPOs.
• Did the companies with the highest subscription ratio also score high on returns? If you look at the top 10 companies by the subscription ratio, the average returns are around 63.9%, while for the top 20 companies by subscription, the average returns were to the tune of 54.88%. In the top 20 list, there was 1 companies with single digit returns, and 3 companies with negative returns; so, subscription ratio is not everything. If you look at the bottom 10 by subscription ratio, the average returns were -8.69%, while for the bottom 20 by subscription ratio, the average returns were to the tune of 5.81%. Clearly, subscription ratio is making a difference to the returns, despite occasional exceptions.

However, there is one drawback in this approach. As we even saw statistically, the subscription ratio approach is biased in favour of small companies. One way to overcome this would be by focusing on the shareholder appetite, which refers to the rupee subscription received.

BEST IPOS BY RUPEE SUBSCRIPTION APPETITE IN 2024

Here are the 20 best IPOs of the year 2024 based on the subscription appetite in rupee terms. This is relatively a better measure in terms of the impact created as you can see in the table below.

Issuer Company	Listing Date	Issue Size (₹ in Crore)	Subscription Ratio (X)	Shareholder Interest (₹)	Issue Price (₹)	Absolute Returns (%)
Bajaj Housing Finance Ltd	05-Sep-24	6,560.00	67.43	4,42,341	70	95.64%
Premier Energies Limited	03-Sep-24	2,830.40	75.00	2,12,280	450	122.20%
TBO Tek Ltd	15-May-24	1,550.81	86.69	1,34,440	920	74.78%
Emcure Pharmaceuticals Ltd	10-Jul-24	1,952.03	67.87	1,32,484	1,008	37.05%
Indegene Ltd	13-May-24	1,841.76	70.30	1,29,476	452	49.10%
Bharti Hexacom Ltd	12-Apr-24	4,275.00	29.88	1,27,737	570	155.26%
Vodafone Idea Ltd	25-Apr-24	18,000.00	6.99	1,25,820	11	-25.09%
Akums Drugs and Pharmaceuticals	06-Aug-24	1,856.74	63.44	1,17,792	679	30.63%
Northern Arc Capital	24-Sep-24	777.00	117.19	91,057	263	-7.57%
Aadhar Housing Finance Ltd	15-May-24	3,000.00	26.76	80,280	315	33.37%
KRN Heat Exchanger	03-Oct-24	341.95	213.41	72,976	220	97.32%
Le Travenues Technology Ltd	18-Jun-24	740.10	98.10	72,604	93	61.13%
Hyundai Motor India	22-Oct-24	27,870.16	2.37	66,052	1,960	-3.06%
P N Gadgil Jewellers Ltd	17-Sep-24	1,100.00	59.41	65,351	480	44.18%
Awfis Space Solutions Ltd	30-May-24	598.93	108.17	64,786	383	84.60%
Apeejay Surrendra Park Hotels Ltd	12-Feb-24	920.00	62.91	57,877	155	-3.41%
Exicom Tele-Systems Ltd	05-May-24	429.00	133.56	57,297	142	123.70%
Interarch Building Products Ltd	26-Aug-24	600.29	93.79	56,301	900	82.00%
Stanley Lifestyles Ltd	28-Jun-24	537.02	97.16	52,177	369	32.53%
Brainbees Solutions Ltd	13-Aug-24	4,193.73	12.22	51,247	465	35.27%

Data Source: NSE (Based on Closing Price on 23-Oct)

Based on the table above, ranking the IPOs on the subscription interest received in the IPO, here are the key inferences.

• As was saw earlier, the total subscription interest received for the 66 IPOs in 2024 was to the tune of ₹32,00,885 Crore, which pre-supposes an overall subscription ratio of 28.29% for all IPOs in 2024 so far. Subscription interest is in rupee terms and is a sign of where most of the monies went and how significant were the returns of companies where the maximum subscription appetite was visible.
• If you look at the top 5 companies by subscription interest, it accounts for about 32.8% of the total subscription interest received, which is a lot of concentration. The top 10 companies got about 49.8% of all the subscription monies received. Clearly, this is biased in favour of the mega IPOs which also got well subscribed. For instance, Bajaj Housing Finance appears top in the list with subscription interest of ₹4.42 Trillion, followed by Premier Energies at ₹2.12 Trillion.
• How did the companies getting the maximum subscription interest fare in terms of subscription ratio. The top 10 by subscription interest received in rupee terms had an average subscription ratio of 61.16 times, while the bottom 10 by subscription interest received in rupee terms had an average subscription ratio of 10.17 times. Clearly, the big names have not only seen good appetite; but also, good subscription ratios.
• The top 10 by subscription interest received in rupee terms had average returns of 56.54% giving an indication that the large mass of retail investors who flocked to the big issues made a lot of money in the IPO. However, 2 IPOs in this top-10 list gave negative returns (Vodafone Idea and Northern Arc Capital). If you look at the bottom 10 in terms of the subscription interest received in rupee terms, the average returns were negative at -0.98%. Clearly, the investors appear to be gravitating towards the right IPO stories.

What do all these IPO numbers mean for the outlook for the IPO market in India.

BEST IS YET TO COME FOR IPOS IN 2024

The year has already seen mega IPOs like Hyundai Motor India, Bajaj Housing Finance, Bharti Hexacom, and Ola Electric sail through. However, between now and the end of 2024, there are several mega IPOs to come. Over the next couple of quarters, we could see big names like NSDL, MobiKwik, Niva Bupa Health, Hero Fincorp, Kalpataru Ltd, JSW Cements, DAM Capital, Hexaware Technologies, Ather Energy, NTPC Green, Avanse Financial etc. The good news is that; once again IPOs have emerged as a distinct asset class for the Indian investors!