The domestic IPO market continues to buzz with 34 listings in the first half of 2024. This marks a 12% increase compared to the same period last year.
Despite this surge in the number of IPOs, the total fundraising amounted to Rs 26,272 crore, falling short of the previous two years. Analysts attribute this shortfall to the absence of mega issues in the market.
Positive Investor response
Investors have generally responded positively to the new listings. Only one IPO failed to attract sufficient interest. Most of the 34 IPOs listed at a premium, and 75% of them have delivered positive returns to shareholders.
Notably, five IPOs have doubled or tripled in value within six months of their listing. Jyoti CNC, one of the first issues of the year, has seen its stock price quadruple from its IPO price of Rs 331.
Comparing 2023 and 2024
With 34 mainboard IPOs already completed in the first half of the year, the tally has surpassed the halfway point of the 58 IPOs that went public in 2023. This significant activity in the first six months indicates a strong pace in the IPO market, suggesting that the total number of IPOs for 2024 could exceed last year’s numbers if the current momentum continues. Last year a total of 57 companies issues debuted in the market.
Bharti Hexacom shares have doubled from their IPO price of Rs 570 within two months. However, following this significant rise, brokerage firm Jefferies downgraded the stock to “hold,” citing limited upside potential.
Underperformers in the Market
Despite the overall positive trend, eight IPOs listed at a discount to their issue price. Of these, five continue to trade below their IPO price, while three have recovered and now offer profitable returns to investors.
Jana Small Finance Bank stands out, having listed at a 4% discount but now trading over 60% higher than its initial price, with a record high of Rs 760.9. Similarly, EPACK Durable and JG Chemicals, which also began trading at a discount, have provided returns of 6-7% as of the latest closing.
Rising Investor Interest
Investor interest in the primary markets is evident, with four IPOs in 2023 seeing overall subscriptions of 100x. In the first six months of 2024, there have already been seven such highly subscribed issues.
Here are the top 10 most subscribed IPOs of the year, with Vibhor Steel Tubes becoming the second most subscribed IPO in Indian history, achieving nearly 300x subscription.
Exicom Tele-Systems is another standout, having risen 3x from its issue price of Rs 142, recently hitting a new high of Rs 461.50 on the NSE. Overall, the first half of 2024 has shown robust activity in the IPO market, with a mix of successes and challenges for investors and companies alike.