Previous Ipos To Still Showing Profits - Nov 27, 2008

According to a study, initial public offers before 2005 still in green. However, IPOs made in the last four years are showing negative returns on an aggregate basis.The study, which calculated the returns of IPOs made in the last five years on the basis of mark-to-market (MTM) prices as of Tuesday, found that the 19 IPOs made in 2004, with a total investment of Rs 248 billion, have a MTM of Rs 339.7 billion, representing a return on investment of 36.92 per cent. Among those, 10 or 47 per cent are showing losses and only nine or 53 per cent are showing profits.

In 2005, there were 39 IPOs with a whole investment of Rs 90.48 billion. Their MTM is now Rs 70.12 billion, signifying a negative return of 22.52 per cent. Among those, 14 or 36 per cent are in the positive territory while 25 or 64 per cent are in the negative zone.In 2006, there were 79 IPOs with a total investment of Rs 176.84 billion. Their MTM is now Rs 114.96 billion, representing a negative return of 34.98 per cent. Among those, only nine or 11 per cent are in green, and as many as 70 or 89 per cent are in the red.

In 2007, there were 103 IPOs with a total investment of Rs.327.28 billion. Their MTM is now Rs 141.44 billion, representing a negative return of 56.79 per cent. Among those, only nine or 9 per cent are showing positive returns and as many as 94 or 91 per cent are in the red.

In 2008, there were 37 IPOs till date with a entire investment of Rs 161.84 billion. Their MTM is now Rs 56.12 billion, signifying a negative return of 65.32 per cent. Among those, only three or 8 per cent are showing profit and 34 or 92 per cent are showing negative returns.Within the five years a total of 277 IPOs were made by both private and public sector companies with a total investment of Rs 1.004 trillion. Their MTM is now Rs 722.4 billion, corresponding to a loss of 28.09 per cent.