Recap 2023, Marching into 2024 (IPOs make a comeback)

29 Dec 2023 , 10:31 AM

YEAR 2023 – IT WAS THE RETURN OF THE IPO STORY

To be fair, the IPO collections in 2023 may not be too close to what we saw a couple of years back at the peak of the digital IPO boom in 2021. However, we all know about what happened to stocks that listed during that boom period. Most of the digital stocks that hit the market at fancy valuations during that period are struggling below their issue price even after two years. In comparison, the IPO story of 2023 has been relatively subdued although there have been a largely number of companies hitting the mainboard. More importantly, it is inducing a lot of big-ticket IPOs to work their way back into the primary market. We are likely to see a slew of big IPOs hitting the market in 2024. The year has ended with the Nifty and Sensex at historic highs and that should give comfort to the issuers and also to the investors. Here is the IPO story of the year gone by; calendar 2023.

IPO STORY 2023 – WHAT WERE THE MAJOR TAKEAWAYS

Here are some key takeaways from the IPO story of year 2023. To paraphrase, it has been a year of robust IPO collections and there would be more to come in 2024. But, first the highlights of the IPO story in year 2023.

1. A total of 59 IPOs listed in the primary markets during the full year. There will be one more listing on December 29, 2023 (Innova Captab Ltd), and that would make the total number of IPOs 60. We have sorted IPOs by date of listing and not by date of closure, but this still gives you a broad picture.

    

2. During the year, out of the 59 IPOs that listed on the NSE / BSE, only 4 IPOs have given negative returns as of the close of the year with the remaining 55 IPOs giving positive returns. Here we have considered returns in absolute terms and these returns have not been annualized, irrespective of the time frame for the generation of the returns.

    

3. The 59 IPOs collected Rs52,521 crore between them. However, against this IPO fund raising, the total response received in the IPOs in terms of expression of interest was to the tune of Rs19,33,333 crore. That effectively means that for 2023 as a whole, the total investor response represented an oversubscription of 36.81 times.

    

4. In terms of the timing of the IPOs, there was a bunching of IPOs in the second half of the year. Out of the 60 IPOs during the year, only 9 IPOs happened in the first half of 2023 while the remaining 51 IPOs happened during the second half of the year. What is the story in terms of collections? 

    

5. Out of the Rs52,521 crore raised during the year, only Rs10,085 crore got raised in the first half of the year, which means more than 80% of the fund raising actually happened in the second half of the year.

    

6. How did the IPOs perform as an asset class? If an investor had got allotment of one lot of each of the IPOs during the year, the annualized returns on the IPO portfolio would have been 57.34%. That is substantial considering that the Nifty and the Sensex have given just about 18-20% returns during the year. 

    

7. How many IPOs contributed to the 57.34% returns for the year in rupee terms? The top-10 highest value creators in rupee terms for the year accounted for 70% of the overall returns while the other 49 companies accounted for just about 30% of the total returns.

To sum it up, year 2023 has been a year of revival for the IPO markets; not only in terms of the number of IPOs hitting the market, but also in terms of the investor response.

IPO STARS 2023 – BEST IPO STORIES BY POST LISTING RETURNS

The table below captures the top 20 companies based on total returns generated by the IPOs in percentage terms. Time is not the constraint here and recent IPOs and previous IPOs are all treated the same

Name	IPO Listing	Issue Size (Rs crore)	Subscription (X)	Issue Price	Market Price (₹)	Returns (%)
IREDA Ltd	29-Nov-23	2,150.21	38.80	32.00	97.55	204.84%
Cyient DLM Ltd	10-Jul-23	592.00	71.35	265.00	675.90	155.06%
Netweb Tech	27-Jul-23	631.00	90.55	500.00	1,203.00	140.60%
Tata Technologies	30-Nov-23	3,042.51	69.43	500.00	1,179.00	135.80%
Vishnu Prakash	05-Sep-23	308.88	87.82	99.00	222.45	124.70%
Senco Gold	14-Jul-23	405.00	77.25	317.00	704.00	122.08%
SignatureGlobal (India)	27-Sep-23	730.00	12.50	385.00	852.00	121.30%
Utkarsh SFB	21-Jul-23	500.00	110.77	25.00	53.10	112.40%
EMS Limited	21-Sep-23	321.24	76.21	211.00	435.00	106.16%
Concord Biotech	18-Aug-23	1,551.00	24.87	741.00	1,453.60	96.17%
Sah Polymers	12-Jan-23	66.30	17.46	65.00	125.85	93.62%
Mankind Pharma	09-May-23	4,326.36	15.32	1,080.00	1,988.60	84.13%
Plaza Wires Ltd	12-Oct-23	71.28	160.97	54.00	99.10	83.52%
JSW Infrastructure	03-Oct-23	2,800.00	39.36	119.00	211.00	77.31%
Motisons Jewellers	26-Dec-23	151.09	173.23	55.00	93.50	70.00%
Divgi TorqTransfer	14-Mar-23	412.12	5.44	590.00	999.00	69.32%
Gandhar Oil Refinery	30-Nov-23	500.69	65.63	169.00	272.80	61.42%
DOMS Industries	20-Dec-23	1,200.00	99.34	790.00	1,270.75	60.85%
SBFC Finance	16-Aug-23	1,025.00	74.06	57.00	90.00	57.89%
Jupiter Life Line	18-Sep-23	869.08	64.80	735.00	1,124.95	53.05%

Data Source: NSE / BSE

Here are some of the key takeaways from the ranking on total percentage returns on the IPOs post listing.

• Out of the 59 IPOs listed till date in 2023, only 4 IPOs gave negative returns while the remaining 55 companies gave positive returns. 

   

• The top 5 IPOs in terms of percentage returns were IREDA Ltd, Cyient DLM, Netweb Technologies, Tata Technologies and Vishu Prakash Punglia. 

   

• A total of 9 IPOs more than doubled over their IPO issue price while IREDA was the only company to more than triple over the IPO price in 2023.

   

• Out of the 59 IPOs, a total of 23 IPOs generated returns of more than 50%, while a total of 31 IPOs generated returns of more than 30% post listing. A total of 48 out of the total 59 IPOs managed to delivery double digit returns over the listing price.

Clearly, year 2023 has been a good year in terms of returns to the investors and also the strike rate in which the IPOs gave positive returns.

IPO STARS 2023 – BEST IPO STORIES BY SUBSCRIPTION RATIO

The table below captures the top 20 companies based on total subscription ratio received by the IPOs in ratio terms. Here we do not look at the size of the IPO, but purely the subscription ratio, so that it is not unfair to the smaller companies.

Name	IPO Listing	Issue Size (Rs crore)	Subscription (X)	Issue Price	Market Price (₹)	Returns (%)
Motisons Jewellers	26-Dec-23	151.09	173.23	55.00	93.50	70.00%
Plaza Wires Ltd	12-Oct-23	71.28	160.97	54.00	99.10	83.52%
Utkarsh SFB	21-Jul-23	500.00	110.77	25.00	53.10	112.40%
IdeaForge Technology	07-Jul-23	567.29	106.06	672.00	827.00	23.07%
DOMS Industries	20-Dec-23	1,200.00	99.34	790.00	1,270.75	60.85%
Aeroflex Industries	31-Aug-23	351.00	97.11	108.00	157.00	45.37%
Ratnaveer Precision	11-Sep-23	165.03	93.99	98.00	115.80	18.16%
Netweb Tech	27-Jul-23	631.00	90.55	500.00	1,203.00	140.60%
Vishnu Prakash	05-Sep-23	308.88	87.82	99.00	222.45	124.70%
Azad Engineering	28-Dec-23	740.00	83.04	524.00	673.25	28.48%
Happy Forgings	27-Dec-23	1,008.59	82.63	850.00	1,020.15	20.02%
Senco Gold	14-Jul-23	405.00	77.25	317.00	704.00	122.08%
ESAF SFB	10-Nov-23	463.00	77.00	60.00	69.00	15.00%
EMS Limited	21-Sep-23	321.24	76.21	211.00	435.00	106.16%
SBFC Finance	16-Aug-23	1,025.00	74.06	57.00	90.00	57.89%
Cyient DLM Ltd	10-Jul-23	592.00	71.35	265.00	675.90	155.06%
Tata Technologies	30-Nov-23	3,042.51	69.43	500.00	1,179.00	135.80%
IKIO Lighting	16-Jun-23	606.50	67.75	285.00	322.50	13.16%
Gandhar Oil Refinery	30-Nov-23	500.69	65.63	169.00	272.80	61.42%
Jupiter Life Line	18-Sep-23	869.08	64.80	735.00	1,124.95	53.05%

Data Source: NSE / BSE

Here are some of the key takeaways from the ranking on total subscription ratio of the IPOs in the year 2023.

• Out of the 59 IPOs listed till date in 2023, only 2 IPOs got undersubscribed with one IPO having to be cancelled due to inadequate QIB subscription. 

   

• The top 5 IPOs in terms of the subscription ratio were Motisons Jewellers, Plaza Wires, Utkarsh Small Finance Bank, Ideaforge Technology and DOMS Industries. 

   

• A total of 4 IPOs got subscribed more than 100 times and all the 4 IPOs were below Rs600 crore in terms of IPO size.

   

• Out of the 59 IPOs, a total of 11 IPOs got subscribed more than 80 times, while a total of 23 IPOs got subscribed more than 50 times. A total of 45 out of the total 59 IPOs managed to get double digit subscription or more.

While the top 4 companies may have been relatively smaller IPOs, you would find that in the list of top 20 IPOs by subscription, there are 4 IPOs of more than Rs1,000 crore with Tata Technologies being the only IPO of more than Rs3,000 crore.

IPO STARS 2023 – IPOS THAT GAVE THE BEST RUPEE PROFITS

One argument against the percentage gains list is that it is biased in favour of small sized IPOs. Hence to give a fair chance to the larger sized IPOs, we also look at the ranking in terms of rupee returns generated by IPOs. Here is the list.

Name	IPO Listing	Issue Size (Rs crore)	Subscription (X)	Issue Price	Market Price	Value Addition
IREDA Ltd	29-Nov-23	2,150.21	38.80	32.00	97.55	4,404.57
Tata Technologies	30-Nov-23	3,042.51	69.43	500.00	1,179.00	4,131.73
Mankind Pharma	09-May-23	4,326.36	15.32	1,080.00	1,988.60	3,639.75
JSW Infrastructure	03-Oct-23	2,800.00	39.36	119.00	211.00	2,164.71
Concord Biotech	18-Aug-23	1,551.00	24.87	741.00	1,453.60	1,491.56
Nexus Select Trust	19-May-23	3,200.00	5.45	100.00	136.45	1,166.40
R R Kabel Ltd	20-Sep-23	1,964.01	18.69	1,035.00	1,580.85	1,035.80
Cyient DLM Ltd	10-Jul-23	592.00	71.35	265.00	675.90	917.94
Netweb Tech	27-Jul-23	631.00	90.55	500.00	1,203.00	887.19
SignatureGlobal (India)	27-Sep-23	730.00	12.50	385.00	852.00	885.48
DOMS Industries	20-Dec-23	1,200.00	99.34	790.00	1,270.75	730.25
Honasa Consumer	07-Nov-23	1,701.44	7.61	324.00	456.50	695.80
SBFC Finance	16-Aug-23	1,025.00	74.06	57.00	90.00	593.42
Utkarsh SFB	21-Jul-23	500.00	110.77	25.00	53.10	562.00
Inox India Ltd	21-Dec-23	1,459.32	61.28	660.00	887.00	501.92
SAMHI Hotels	22-Sep-23	1,370.10	5.57	126.00	171.55	495.30
Senco Gold	14-Jul-23	405.00	77.25	317.00	704.00	494.43
Jupiter Life Line	18-Sep-23	869.08	64.80	735.00	1,124.95	461.09
Cello World Ltd	06-Nov-23	1,900.00	41.69	648.00	794.00	428.09
Vishnu Prakash	05-Sep-23	308.88	87.82	99.00	222.45	385.16

Data Source: NSE / BSE

Here are some of the key takeaways from the ranking on total rupee returns on the IPOs post listing.

• Out of the 59 IPOs listed till date in 2023, the top 20 IPOs by rupee value addition, accounted for 86.6% of all the returns generated by the IPOs in the year 2023.

   

• The top 5 IPOs in terms of rupee value addition are IREDA Ltd, Tata Technologies Ltd, Mankind Pharma Ltd, JSW Infrastructure Ltd and Concord Biotech. 

   

• In terms of total value created post listing, only two companies generated value of more than Rs4,000 crore while 7 companies in total generated value of more than Rs1,000 crore.

   

• The top 7 companies by value creation accounted for 60% of the total value creation by all IPOs in the year 2023. While percentage returns are more spread out, larger issues outperforming has a much bigger wealth effect for investors. That is critical.

Clearly, year 2023 has been a positive year in terms of value generation with 38 out of the 59 companies coming out with IPOs managing to generating market value of more than Rs100 crore during the year. That surely adds quality paper to the secondary markets.

IPO STARS 2023 – IPOS THAT COLLECTED MAXIMUM RUPEE RESPONSE

You can look at this list as the counterpoint to the oversubscription list. In the oversubscription list, the rankings are skewed in favour of smaller companies. When we look at rupee collections, it is in favour of the larger companies. Here is the list.

Name	IPO Listing	Issue Size (Rs crore)	Subscription (X)	Issue Price	Market Price	Collections
Tata Technologies	30-Nov-23	3,042.51	69.43	500.00	1,179.00	2,11,241.47
DOMS industries	20-Dec-23	1,200.00	99.34	790.00	1,270.75	1,19,208.00
JSW Infrastructure	03-Oct-23	2,800.00	39.36	119.00	211.00	1,10,208.00
Inox India Ltd	21-Dec-23	1,459.32	61.28	660.00	887.00	89,427.13
IREDA Ltd	29-Nov-23	2,150.21	38.80	32.00	97.55	83,428.15
Happy Forgings	27-Dec-23	1,008.59	82.63	850.00	1,020.15	83,339.79
Cello World Ltd	06-Nov-23	1,900.00	41.69	648.00	794.00	79,211.00
SBFC Finance	16-Aug-23	1,025.00	74.06	57.00	90.00	75,911.50
Mankind Pharma	09-May-23	4,326.36	15.32	1,080.00	1,988.60	66,279.84
Azad Engineering	28-Dec-23	740.00	83.04	524.00	673.25	61,449.60
IdeaForge Technology	07-Jul-23	567.29	106.06	672.00	827.00	60,166.78
Netweb Tech	27-Jul-23	631.00	90.55	500.00	1,203.00	57,137.05
Jupiter Life Line	18-Sep-23	869.08	64.80	735.00	1,124.95	56,316.38
Utkarsh SFB	21-Jul-23	500.00	110.77	25.00	53.10	55,385.00
India Shelter Finance	20-Dec-23	1,200.00	38.59	493.00	527.70	46,308.00
ASK Automotive	15-Nov-23	834.00	51.14	282.00	288.00	42,650.76
Cyient DLM Ltd	10-Jul-23	592.00	71.35	265.00	675.90	42,239.20
IKIO Lighting	16-Jun-23	606.50	67.75	285.00	322.50	41,090.38
Concord Biotech	18-Aug-23	1,551.00	24.87	741.00	1,453.60	38,573.37
R R Kabel Ltd	20-Sep-23	1,964.01	18.69	1,035.00	1,580.85	36,707.35

Data Source: NSE / BSE

Here are some of the key takeaways from the ranking on total rupee collections across all the IPOs in 2023. This list is skewed in favour of the larger issues.

• Out of the 59 IPOs listed till date in 2023, the top 20 IPOs by total collections, accounted for more than 75% of the overall collections by the IPOs in year 2023.

   

• The top 5 IPOs in terms of IPO rupee collections for the year are Tata Technologies, DOMS Industries Ltd, JSW Infrastructure, Inox India, and IREDA Ltd. 

   

• This also dispels the myth that large sized companies with mega collections do not generate smart returns. In fact, the top-5 list above has one company with more than 100% returns and one company with more than 200% returns since listing.

   

• There were 3 IPOs that collected more than Rs1,00,000 crore while a total of 14 IPOs collected more than Rs50,000 crore. All these 14 IPOs have given positive returns post listing. Just goes to show that there is appetite and returns in large IPOs too.

Year 2023 has been a positive year not only in terms of returns but also in terms of collections. To get a better perspective of the IPO story, we have looked at subscriptions and returns in terms of value addition and in terms of ratios. That gives a comprehensive picture. 

For the year 2024, it sets the tone in the form of robust IPO markets and strong demand. Incidentally, the demand has been strong even in the case of simultaneous IPOs. The onus is now on the IPO issuers to haver a good story, position the IPO properly and to leave something on the table for the investor.