DSIJ.in JULY 8 - 21, 2019 I DALAL STREET INVESTMENT JOURNAL (^57)
IPO performance 2019
Stock Listing date Offer Price Listing price Listing Gains
Neogen Chemicals 8 May 19 215.00 263.55 22.58
Polycab India 16-Apr-19 538.00 655.00 21.75
Metropolis Healthcare 15-Apr-19 880.00 959.55 9.04
Rail Vikas Nigam 11-Apr-19 19.00 19.05 -0.26
Embassy Office Parks 01-Apr-19 300.00 314.10 4.70
MSTC 29-Mar-19 120.00 114.20 -4.83
Chalet Hotels 07-Feb-19 280.00 290.4 3.71
Xelmoc design & Tech 04-Feb-19 66.00 59.85 9.32
Average Gains 8.24%
T
he IPO market in India has been extremely investor-friendly all
these years, so much so that we find many ‘IPO only’ investors
across the country. Indeed, IPO investing has been extremely
popular with the investors for decades. However, there is
something amiss about IPOs in 2019. IPOs have become
non-existent. You hardly find any investor talking about IPOs
and even lesser number of investors who are excited about
investing in IPOs. The euphoria is missing in the primary market
even when the Sensex – the key benchmark index – is trading close to its all-time
highs. Normally, when the valuations are high and the key indices are trading at
historically high P/E levels, we have seen companies hitting the IPO market to raise
equity capital. But this time around, very few companies have hit the markets despite
higher P/E valuations for the market.
Says Rishabh Jain, who has been investing in equities for more than 20 years now,
“My 99 per cent of the equity portfolio is IPO investments. I do not know of any
other better way to participate in the equity markets than investing in quality IPOs.
More than half of my portfolio consists of multi-baggers which I purchased when the
respective companies hit the markets for the first time. One thing though, the IPO
market is throwing less opportunities these days. I hope the situation improves in the
second half and I get something to fish this year”.
IPO market in 2019
The year 2019 so far has been a disappointing year for the IPO market when it comes
to the number of issues and the amount raised in the primary market. So far in 2019,
only 8 IPOs have hit the market. The best part is that the average listing gains have
been impressive at 8 per cent approx.
After an extremely slow IPO market in the first half there are signs of the momentum
picking up in the second half of 2019. As of now, around 70 companies are expected
to hit the markets in the remaining part of the year as they have already received
clearances from the market regulator SEBI, even as 19 more companies are waiting for
clearance.
Fund raising via IPOs in 1st half of 2019 is at 4-year low. In eight
issues a cumulative `5,509 crore was raised though IPOs. This is the
lowest amount raised in past four years. The year 2015 saw eight
companies raising `3,849 crore via IPO route