InvestorQ : How was the performance of the IPOs overall in the financial year so far with less than a month to go?
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How was the performance of the IPOs overall in the financial year so far with less than a month to go?

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Arusha Ray answered.
5 months ago
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In fact, in the financial year 2020-21, the IPOs as an asset class have done very well, but we will come to that later. One must put it in perspective first. For example, Nifty and the Sensex staged an incredible 100% rally from the lows of the pandemic in Mar-20. However, IPOs may not be far behind and have done relatively well as a passive asset class. Let us look at the IPO story in greater detail.

IPOs may have started off with whimper in FY21 due to the pandemic but it is certainly closing with a bang. The dull start to FY21 was because COVID-19 had gripped the economy by the start of 2020. Only the SBI Cards IPO managed to sail through in Mar-20 but that was about the only major IPO before the IPO markets went into 3-4 months of quiescence. The real action in IPOs only started around August and September.

However, in the second half of the year, the IPOs gathered a lot of steam, especially in the third and fourth quarters of FY21. But that is just part of the story. What really stood out in FY21 was that most of the IPOs got a tremendous response from the three classes of investors viz. the retail investors, the HNIs and the qualified institutional buyers. Let us quickly look at how the IPOs did in FY21 overall.

If one were to look back at the 25 IPOs that got listed on the main board in FY21 from SBI Cards to Heranba, the story is interesting. There are a few more IPOs in this month but the overall story will not change much. Overall, only 3 IPOs; Antony Waste, IRFC and Brookefield REIT are trading at a small discount to the issue price. The remaining 22 IPOs are all quoting at a premium to their issue prices.

It is not just the positive returns but even the quantum of returns are flattering. Returns are as high as 375% in the case of Route Mobile and clocked over 100% in 3 IPOs and nearly 11 IPOs clocked more than 40% returns. All this has happened in well under 1 year if you look at the concentration. One more thing to note. If you have just blindly allotted equal money in all the IPOs in FY21, you would have still earned 43% returns in a little over 6 months.

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