IPOs a big hit for investors so far this year

Market players say performance trend indicates investors should pick and choose IPOs to invest in

Last week, IPO (initial public offering) investors in Avenue Supermarts were rejoicing, as the stock touched Rs 1,000, 3.3 times the issue price of Rs 299. However,  not all investors are as lucky as those in Avenue Supermarts. The IPO track record in 2017 isn’t bad either. Two of three IPOs that have hit markets this year have made money for the investors. At Thursday’s closing price, 10 of the 15 companies that launched IPOs this year are trading above their issue price. The average issue-to-date gains for these 15 companies are over 42 per cent, against 20 per cent gain on the Sensex index. However, the average is skewed by the three best-performers — Avenue Supermarts, Shankara Building Products and CDSL, each of which has given triple-digit returns. Excluding these three, the average issue-to-date returns drop to just 11 per cent. There are three companies – S Chand & Company, CL Educate and GTPL Hathway —whose shares have slipped more than 20 per cent below their issue prices. The post-listing performance is critical for investor sentiment towards the primary market. So far this year, the 15 IPOs have raised over Rs 12,000crore.  Market players say the performance trend indicates investors should pick and choose IPOs to invest in, and not just blindly invest in any issue.