IPOs: Bumper debut stocks tend to gain more in the long run

Priya Kansara Mumbai March 21 | Updated on January 15, 2018


Listing gains of only three such firms have eroded till date

Over 85 per cent of stocks marking their entry on the bourses with bumper debuts in the last one year have continued to give handsome returns to investors. According to data provided by Prime Database, 15 out of 26 listings registered strong debuts in the last one year (with closing gains of over 10 per cent). Of these, 13 notched up further gains over a period of time.

This includes Teamlease Services, Equitas Holdings, Thyrocare Technologies, Ujjivan Financial Services, Parag Milk Foods, Mahanagar Gas, Quess Corp, Advanced Enzymes Technologies, Dilip Buildcon, RBL Bank, GNA Axles and Endurance Technologies. Listing gains of only three companies (Teamlease Services, Parag Milk Foods, and GNA Axles) have eroded till date. This is also true for companies which got listed in 2015.

Of the eight grand debuts that took place in 2015, only two companies have not been able to hold on to their superior performance till date. While the stock price of Inox Wind has nearly halved, gains in Narayana Hrudayalaya have tapered off a bit.

‘Don’t cash out’

Market analysts say that the trend highlights the importance of holding on to stocks which registered strong debuts.

“Many retail investors who get allotment in the IPOs tend to cash out (sell) from newly-listed companies, which have seen record listing. But this is not a wise strategy,” said a market analyst.

Avenue Supermarts soars

On Tuesday, Avenue Supermarts made a bumper debut with its stock price closing at more than double the issue price. This has been the best debut so far in the last two years. The shares closed at ₹640.75, on the BSE.

Published on March 21, 2017

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