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The year 2021 turned out to be the best year for the Indian primary market. As many as 64 mainboard companies raised around ₹1.2 lakh crore through initial public offerings (IPOs), the highest amount raised through public issues in a single calendar year.
Many of these IPOs gave outsized returns while a few disappointed. On the whole, investors made good money by investing in IPOs in 2021.
If an investor had invested ₹10,000 in each of the 64 IPOs, the current value of their investment would be ₹10,08,076 as against the investment value of ₹6,40,000. This translates in to a gain of 57.5 per cent from the mainboard IPOs in 2021.
Diverse sectors
From new-age internet companies like Paytm, Zomato and Nykaa to traditional healthcare companies, insurers and diagnostic players such as Policybazaar, Star Health Insurance and Glenmark Life Sciences and several others from a diverse range of sectors tapped the capital market to make the best out of the investor euphoria.
But not all IPOs won the interest of discerning Indian investors. 19 out of the 64 IPOs, including India's biggest public issue — Paytm’s ₹18,300-crore share sale — got listed at a discount. While Aditya Birla Sun Life AMC’s issue opened flat.
Also, not all stocks have retained the investor interest post their listing. As of December 31, only 36 companies were ruling well above their respective IPO prices while the remaining 28 were trading in the negative zone.
Returns offered
Investment in healthcare supplier Nureca’s IPO would have offered the highest return as the stock price of the company jumped 400 per cent to ₹1,998 as on Friday from the issue price of ₹400. Similarly, the stock price of MTAR Technologies (328 per cent), Paras Defence & Space Technologies (324 per cent), Laxmi Organic Industries (232 per cent), Easy Trip Planners (188 per cent) and LatentView Analytics (185 per cent) have all witnessed significant jump from their issue price.
Wealth destroyers
On the other hand, investment in Suryoday Small Finance Bank IPO would have wiped off more than 50 per cent of the money invested as the stock closed at ₹145 in BSE on Friday as against the issue price of ₹305. Similarly, stocks of CarTrade Tech, Windlas Biotech, One 97 Communications (Paytm), Fino Payments Bank and S.J.S. Enterprises turned out to be biggest wealth destroyers, whose shares were trading at a discount of 29-48 per cent from their respective issue price.
With large listing gains in some IPOs, many investors began investing in primary market purely with the intent of flipping on the listing day. Sigachi Industries saw maximum gain on its market debut offering a listing gain of 270 per cent to the investors. Similarly, stocks of Paras Defence & Space Technologies (185 per cent), LatentView Analytics (148 per cent), Tatva Chintan Pharma Chem (113 per cent), Indigo Paints (109 per cent) and G R Infraprojects (109 per cent) have all offered a windfall gain to investors on their listing day.
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