The Sensex seems to be under some ‘black magic’ spell and the primary market is feeling its curse. With just seven companies’ shares trading above their issue price, the primary market seems to be losing its sheen.
Of the 24 initial public offers that hit the market since the beginning of the current calendar year, less than a third of them have managed to give positive returns. Of this, only three companies have managed to give returns above 50% while the rest are hovering at an average of 15%. This seems to be in stark contrast to the triple-digit returns that retail investors are used to earning from IPOs till some time back.
Among the losers, casting and forging company Porwal Auto has been hit the hardest, trading 70% below its issue price. Metals company, Manaksia, seems to have been caught on the wrong side of the commodity cycle. It came with an issue price of Rs 160, and the stock was opened for trade at Rs 200. Currently, the stock is trading at Rs 74.
The increased emphasis on infrastructure by the government had resulted in many companies from engineering and construction space tapping the bourses for their expansion plans. About 40% of the new IPOs are either of cement or construction or capital goods companies. However, all of them have had the same fate at the altar of market.
On the better performers front, Aishwarya Telecom, the telecom equipment manufacturing company, is the one with highest returns of 110%, followed by Burnpur Cement with 55% returns. Next in line is another telecom service provider On mobile Global with 51% returns. Other companies that are at least 10% above their issue price include Titagarh Wagons, retail company Bang Overseas, and Kirti Dyes. Incidentally, the smaller issues have outperformed the bigger ones.
The total amount raised in this period was Rs 17,368 crore, of which the companies, which are still giving positive returns, contributed a small 5%. Reliance Power, the biggest initial public offer of the Indian equity market, is trading 56% below its issue price. Future Capital, from the house of the biggest retailer of India, is also 42% down from its offer price. The other bigger issues that are on an average 13% below their issue price are Rural Electrification Board, IRB Infrastructure and BGR Energy.
Of the 24 initial public offers that hit the market since the beginning of the current calendar year, less than a third of them have managed to give positive returns. Of this, only three companies have managed to give returns above 50% while the rest are hovering at an average of 15%. This seems to be in stark contrast to the triple-digit returns that retail investors are used to earning from IPOs till some time back.
Among the losers, casting and forging company Porwal Auto has been hit the hardest, trading 70% below its issue price. Metals company, Manaksia, seems to have been caught on the wrong side of the commodity cycle. It came with an issue price of Rs 160, and the stock was opened for trade at Rs 200. Currently, the stock is trading at Rs 74.
The increased emphasis on infrastructure by the government had resulted in many companies from engineering and construction space tapping the bourses for their expansion plans. About 40% of the new IPOs are either of cement or construction or capital goods companies. However, all of them have had the same fate at the altar of market.
On the better performers front, Aishwarya Telecom, the telecom equipment manufacturing company, is the one with highest returns of 110%, followed by Burnpur Cement with 55% returns. Next in line is another telecom service provider On mobile Global with 51% returns. Other companies that are at least 10% above their issue price include Titagarh Wagons, retail company Bang Overseas, and Kirti Dyes. Incidentally, the smaller issues have outperformed the bigger ones.
The total amount raised in this period was Rs 17,368 crore, of which the companies, which are still giving positive returns, contributed a small 5%. Reliance Power, the biggest initial public offer of the Indian equity market, is trading 56% below its issue price. Future Capital, from the house of the biggest retailer of India, is also 42% down from its offer price. The other bigger issues that are on an average 13% below their issue price are Rural Electrification Board, IRB Infrastructure and BGR Energy.
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