All but two mainboard IPOs of the year cheered investors with handsome returns, even as concerns over weakness in the broader market forced 47 companies to shelve new public offerings worth Rs 51,000 crore.
Among the issues that hit the market in 2019, three delivered over 100 per cent return within days of listings. Thirteen of the 15 debutants beat Sensex’s 15 per cent return for the year. Ironically, the biggest IPO of the year proved to be biggest value destructor.
Shares of IRCTC, which got listed on October 14, zoomed 175 per cent over their issue price of Rs 320 to Rs 880.85 on BSE.
IndiaMart InterMesh surged 113 per cent to Rs 2,072 against an issue price of Rs 973. The scrip was listed on July 4.
Affle India, listed on August 8, soared 109 per cent to Rs 1,554 over its issue price of Rs 745. Polycab India jumped 79 per cent since its listing on April 16 to trade at Rs 964 on Friday. Neogen Chemicals and Metropolis Healthcare gained over 50 per cent each.
“Successful IPOs in 2019 were all from successful themes, which the secondary market already liked,” said G Chokkalingam of Equinomics Research and Advisory.
“The same situation would continue in the first half of 2020. But a possible significant outperformance of smallcap and midcap stocks in the secondary market could bring in more IPOs to the market,” he said.
Ajit Mishra of Religare Securities said there could be 40-50 mainboard IPOs in the coming year, if market conditions remain favourable.
Sterling Wilson, with a 62 per cent slide, was the worst listing of 2019. The stock fell as promoters of Sterling and Wilson Solar (SWSL), Shapoorji Pallonji Group and Khurshed Yazdi Daruvala, failed to honour their commitments made during the August IPO issue and sought more time from the company’s board to repay loans worth Rs 2,341 crore citing unforeseen reasons, including a liquidity crisis at the group level.
Sterling & Wilson Solar raised Rs 2,850 crore through the IPO against the year’s average issue size of Rs 773 crore, showed a study by PRIME Database.
Some analysts blamed the merchant banker for faulty pricing of the IPO, but others said investors themselves are responsible if a stock cracks after listing, as they had all the information before deciding to bet on the issue.
Meanwhile, Xelpmoc Design & Tech, with a 3 per cent fall, was another debutant that failed to offer any return. This scrip is down 3 per cent over its issue price so far. KPR Agrochem withdrew its Rs 283 crore initial public offering a day before it was to hit the market in June.
