Recent IPOs ring in good times for investors

The newly-listed companies have had a dream run on the bourses of late, registering gains in the range of 12-380 per cent over their offer price.

According to data available, only four of the last 30 new issues "" IBP (down 6.8 per cent), MSK Projects (down 2.38 per cent), Deccan Chronicle (down 9.48 per cent) and Sah Petroleums (down 23.29 per cent) "" are currently trading below their respective offer price.

Among the biggest gainers in terms of absolute returns is Indiabulls Financial. The stock has appreciated 379.21 per cent from its offer price of Rs 19 to Tuesday's closing price of Rs 91.05.

While one can argue that the Sensex itself has registered gains during the last one year, there are eight companies that have fetched returns of more than 150 per cent and 16 companies have registered gains in the range of 12 to 140 per cent.

The Sensex has gone up from 5823.17 on March 1, 2004 to Tuesday's close of 6544.77, up 12.38 per cent.

A leading merchant banker involved in few of those issues last year said: "Strong returns from the last few issue clearly suggest that IPOs are the safest route for first-time investors. The gains also suggest that the quality of IPOs has improved following the stringent norms set up by the market regulator for clearing new issues.

"IPOs have proved to be a good way to expand the investor base. This is evident from the surge in demat registrations. The success of the past few issues has definitely changed the mindset of the retail investor," said a merchant banker.