InvestorQ : Why have some of the IPO listings like Kalyan Jewellers and Suryoday SFB been a tad disappointing in the previous week?
Sam Eswaran made post

Why have some of the IPO listings like Kalyan Jewellers and Suryoday SFB been a tad disappointing in the previous week?

Moii Chavate answered.
1 year ago

You are absolutely correct that the listing of Kalyan Jewellers and Suryoday Small Finance Bank were largely disappointing during the week. This comes after some fantastic listing experiences that we had in the last few months. In fact, the shares of all the 4 companies that listed this week below their issue price. That may not be too encouraging but, perhaps, it also underlines a return to reality for the frenzy surrounding IPOs and IPO listings.

Suryoday opened for listing at a discount of 4% to its issue price and closed the first day of trading nearly 9% down at a price of Rs.276 as against its issue price of Rs.305. In a similar instance, Kalyan Jewellers also got listed at a discount of 14% at a price of Rs.74, against the issue price of Rs.85. Kalyan Jewellers also closed the day at around the same level. Both Kalyan and Suryoday had seen reasonably oversubscription of around 2 times.

That is not all. Earlier on Wednesday, Anupam Rasayan India which is a speciality chemicals company based out of Gujarat, also listed at a discount to issue price. Even the much hyped and much oversubscribed Easy Trip Planners also delivered muted gains. Ironically, Anupam Rasayan had been oversubscribed by 44 times while Easy Trip Planners, an OFS issue, had been subscribed by a whopping 160 times.

Of course, this is not just about the companies but also about the market conditions. Rising coronavirus cases and bond yields have already rattled investors in last few weeks and the tepid listings only further underscored that trend. It is not just about the listings of this week. In fact, companies that got listed in the last 6 months have seen stock prices plummet nearly 20% to 30% from their recent peak levels, raising questions about the IPO frenzy.

Both Anupam Rasayan and Easy Trip saw enthusiastic response from HNIs, who normally borrow and invest in IPOs. However, the tepid losses led to huge effective losses on these IPOs. That perhaps explains the tepid response to the subsequent listings like Suryoday and Kalyan Jewellers.