InvestorQ : How do you think the IPOs have performed in the year 2022 so far. Are there reasons to celebrate?
ishika Banerjee made post

How do you think the IPOs have performed in the year 2022 so far. Are there reasons to celebrate?

2 weeks ago

For the year 2022, it is obvious that the major focus is on the LIC IPO. However, that is not the entire IPO market as there are enough IPOs that have done extremely well in 202. Just look at these numbers. Despite the underperformance of some IPOs, the simple average of returns given by IPOs in 2022, stood at an amazing level of 50%. This is all the more interesting because during this same period, the Sensex has given just about 1.6% returns. In short, you would have been better off investing in IPOs rather than the indices.

For the calendar year 2022 till date, a total of 51 IPOs raised Rs38,155 crore, but this story was largely dominated by the Rs20,500 crore LIC IPO. In the same period in 2021, a total of Rs64,768 crore of IPO fund raising had been already completed. So, on that front, IPOs are surely lagging behind. Some of the big ticket IPOs in the year included LIC, Delhivery, Patanjali (formerly Ruchi Soya) and Adani Wilmar. This is unlike 2021, when big ticket digital IPOs like Zomato, Nykaa, Policybazaar and Paytm dominated the IPO markets.

To an extent, one can say that the sentiments in the IPO market were soured by the plethora of 2021 IPOs that disappointed post listing. Some of the big losers of 2021 in the IPO market post listing included, One97 Communications giving up 67%, Zomato down 20.7% and Policybazaar down 49.3%. That is not all. Star Health became the only IPO in 2021 to get undersubscribed and has given up 18.2% while CarTrade is down nearly 60.1%. Even sedate names like Nuvoco Vistas, IRFC and Sanmar Chemicals have lost money.

Now for the IPO show in 2022. Statistically, 43% of the IPOs listed at a premium of 20% or more. The big gainers included Adani Wilmar up 206% and Patanjali Foods up by nearly 106% since the listing of the IPO. There were several other quality performers like Vedant Fashions (Manyavar) gaining 57.3%, Powergrid giving 38% returns and Delhivery appreciating by 17.5%. In short, the 50% arithmetic mean of returns shows us that IPOs continue to be a robust asset class in India even today.