IPOs give average 50% returns in 2022 despite fall in number: Analysis

Despite the fall in share sales through initial public offers so far this year, these issues have given a good 50 per cent average returns, while the Sensex gained only 1.6 per cent, shows an analysis.

So far in 2022, 51 IPOs have raised Rs 38,155 crore, down from Rs 64,768 crore through 55 issues in the same period last year.

There were only eight big-ticket issues -- with the over Rs 20,500-crore LIC being the biggest but one of the worst performers -- in 2022 compared to the last year, where 33 companies raised more than Rs 1,000 crore each, according to an analysis by Bank of Baroda house economist Dipanwita Mazumdar.

Till September 2021, the IPOs gave a return of 74 per cent, whereas Sensex had risen by 20 per cent but 16 of those big-ticket IPOs with issue size of above Rs 1,000 crore are operating at a discount.

In all of 2021, companies raised Rs 1,21,680 crore from the market and the boom can be attributed to the Sensex rally as the index jumped from 40,000 points to 60,000 points between April and October 2021.

From the 2021 issues, 30 per cent listed at a premium of above 20 per cent, compared to 15 per cent in 2022, and 50 per cent of 2021 issues returned more than 20 per cent the same for 2022 is 43 per cent.

As against this, Sensex saw considerable volatility in through 2022 trading in the range of 50,000-60,000.

In 2022, the share of companies receiving negative return rose to 40 per cent, above 45 per cent companies gave over 20 per cent returns and only five issues returned more than 100 per cent from the issue price.

The biggest losers are One97 Communications (Paytm) which is down 67 per cent from its issue price, LIC down 31.1 per cent, Zomato (down 20.7 per cent), PB Fintech (down 49.3 per cent) Star Health & Allied Insurance (down 18.2 per cent), CarTrade (60.1 per cent below issue price), Nuvoco Vistas Corporation (down 34.3 per cent), Indian Railway Finance (down 12.3 per cent) and Sanmar Chemicals is down 22.1 per cent from the issue price.

On the other hand the biggest gainers are Adani Wilmar, up 205.6 percent over issue price, Sona Precision (81.6 percent), Patanjali Foods (up 106 per cent), Powergrid (38 per cent), Vedant Fashions (up 57.3 per cent) and Delhivery gaining 17.5 per cent so far.