IPOs in FY23 have been fewer but many have fared better than the previous year
- The post-Covid boom saw 84 IPOs being listed on the stock exchanges in FY21 and FY22, but that pace has slowed down considerably in FY23.
- Yet, quantity might not always be the best indicator.
- A Business Insider India analysis shows FY23 IPOs have been relatively better than the same period in FY22.
AdvertisementThe post-Covid boom saw a whopping 84 IPOs in FY21 and FY22. In FY23, the IPO frenzy has slowed down drastically in FY23 for multiple reasons – an economic slowdown, the post-Covid boom fizzling out, geopolitical issues like the Russia-Ukraine war wreaking havoc, inflation hitting multi-year highs and more.
However, according to a report by Axis Capital and an analysis by Business Insider India, the quality of these IPOs has been better in FY23 than in the same period in FY22.
So far, FY23 has seen the 12 IPOs – of this, shares of Dreamfolks Services are yet to be listed on the exchanges. Essentially, 11 IPOs have been launched and listed on the stock exchanges at the end of August.
In the same period last year, 20 IPOs were launched.
This shows that while FY23 has seen fewer IPOs than FY22 till August 31, FY23 has fared marginally better when it comes to listing gains. It’s not just India which has seen less number of IPOs this year, though – a Bloomberg report suggests IPOs have slumped by two-thirds globally.
However, where FY23 takes a massive lead over FY22 is IPOs which are still in the green when compared to their issue prices. While 9 out of 11 IPOs of FY23 are still in the green, half of the 20 IPOs of FY22 are in the red.
Investors who subscribed to FY23 IPOs are far better off when compared to FY22. It’s worth pointing out that FY23 has seen one major dud – LIC – which listed at a discount. Since the listing, LIC investors have lost nearly a fourth of their investment value.
Listing gains in FY23 have been moderate
IPOs in FY23 have failed to deliver the bumper listing gains which investors had gotten used to in 2020, 2021 and 2022.
The best performer in FY23 so far is Campus Activewear with a listing gain of 22%.
In comparison, the best performer in FY22 in the same period is GR Infraprojects, which doubled investor wealth on listing.
However, in FY23, only three IPOs eroded investor wealth upon listing. In FY22, six IPOs were listed in the red. The biggest dud, though, is Paytm, which listed in the second half of the year. The Vijay Shekhar Sharma-led company has wiped out two-thirds of investor wealth since its listing in November last year.
So far, FY23 IPOs have given an average listing gain of 4%, when compared to 25% in FY22.
Tough market conditions = moderate growth in investments
AdvertisementWhile FY23 has fared a lot better when it comes to maintaining investments in the green, the growth rate has been moderate in comparison to FY22.
While the highest growth in the value of a stock in FY23 stood at 69%, FY22’s best performer (in the same period) has increased investor wealth by 125%.
In fact, FY22 has four stocks which have more than doubled investor wealth.
On the other hand, there are only two stocks in FY23 which are in the red, while half of the IPOs of FY22 (till August) are in the red right now.
So far, FY23 IPOs have given an average return on investment of 23%, when compared to 24% in FY22.
Here’s how FY23 IPOs have fared since their listing:
Best IPOs of FY22 and FY23
|Data Patterns (India)||₹555||₹1,068||92%|
|Latent View Analytics||₹197||₹368||87%|
|Hariom Pipes Industries||₹153||₹274||79%|
|Go Fashion (India)||₹690||₹1,159||68%|
|G R Infraprojects||₹837||₹1,359||62%|
|Supriya Life Sciences||₹265||₹355||34%|
Source: Axis Capital | CMP as on August 30, 2022
Worst IPOs of FY22 and FY23
|Fino Payments Bank||₹577||₹262||-55%|
|AGS Transact Tech||₹175||₹87||-50%|
|Aditya Birla Sun Life AMC||₹712||₹460||-35%|
|Prudent Corp Advisory||₹630||₹610||-3%|
Source: Axis Capital | CMP as on August 30, 2022
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