IPO boom sees massive gains

Scrips surge 60-450% since listing.

Investors in 11 of the 14 public issues that hit the market in 2004-05 who sold shares on the day of listing have realised that patience pays.

Had they held on to the shares, they would have realised gains ranging between 60 per cent and 450 per cent from the day of listing of these shares till today. In other words, rushing in to encash the first day's gains has meant a notional loss of this magnitude.

Of the 14 public issues in 2002-05, the shares of as many as 11 companies are commanding a hefty premium to the issue price. These shares have also outperformed the BSE-500 and NSE mid-cap index by a wide margin.

Of the remaining three, scrips of Sah Petroleum and Deccan Chronicle are being traded below their respective issue price, while Datamatics Technologies is quoted at a modest 3 per cent premium over the issue price.

The best of the lot has been the India Bulls Financial Services offer. Issued at Rs 19 per share, the India Bulls scrip is commanding a premium of 466 per cent.

The Ramakrishna Forging stock is up 191 per cent over the issue price, the NDTV scrip has gained 162 per cent, the Crew Boss scrip has surged 156 per cent and the Bharti Shipyard stock has appreciated by 121 per cent.

The scrips of TCS, Sal Steel and MSK Projects, which listed with modest gains, are currently up by over 50 per cent each.

The India Bulls stock was listed at Rs 23.85 on September 24, 2004, up 25.53 per cent over the issue price of Rs 19. The shares of India Bulls rocketed on account of FII buying and the company's proposal to float a GDR issue. The combination of the two saw the company's shares appreciate further by over 351 per cent over the listing price.

Issued at Rs 20 per share, the Ramakrishna Forging scrip had a great debut on the bourses, appreciating over 91 per cent on the day of listing to Rs 38.25. Riding the investor interest in forging scrips, the stock appreciated over 50 per cent to close at Rs 58.20 over its listing price.

The NDTV scrip, too, had a good opening, registering 42 per cent gains on the day of listing over its issue price of Rs 70. The stock gathered steam on good quarterly numbers and surged further by 84.56 per cent over its listing price of Rs 99.40.

The TCS stock ended the first day of listing with a 16 per cent premium on an issue price of Rs 850. The stock is currently trading at an all-time high of Rs 1,451.65 on the BSE, up 71 per cent over its issue price of Rs 850 per share.

MSK Projects was traded at RS 37.80 per share on debut, translating into a discount of 6 per cent on the issue price of Rs 40 per share.

The strong order books and re-rating of engineering construction shares saw the MSK Projects stock firming up thereafter, up 60 per cent over the listing price of Rs 37.80 per share.