Many IPOs that listed with a lot of fanfare are now beaten down

Many IPOs that listed with a lot of fanfare are now beaten down
  • Many top companies listed with a high premium in 2021, when the IPO market was buzzing.
  • But many stocks with stellar listings in the last one year have been beaten down sharply in the last one year.
  • Markets have been very volatile in the same period, which is also why in 2022 fewer companies went public.
Mankind Pharma’s stellar listing helped generate good returns to its investors. In the last two years, there have been many such blockbuster stock market debuts and few could sustain the hype of their listing day returns.

Riding high on the positive momentum seen in 2021, many stocks gave stellar returns to investors on listing day. So much so, fundraising via IPOs crossed the ₹1 lakh crore mark in 2021 for the very first time in the calendar year, according to Prime Database. As many as 64 companies listed on the exchanges that year, and most companies gave either positive or significant returns on the day of debut.

But the very next year in 2022, stock markets turned volatile and not only did IPOs turn rarer, most of the new stars of 2021 saw their values pared down.

The best gainers who lost
Hyderabad-based pharmaceutical company, Sigachi Industries delivered the highest listing gain as it more than tripled investors' money on the day of listing. In the last one year its stock is down nearly 2%. The stock was listed in November 2021.

Defence equipment maker Paras Defence & Space Technologies was another big hit in the market that nearly tripled investors' money on the listing day itself. In the last one year, the stock is down 10%. The stock was listed in October 2021.


Surprisingly, the new age e-commerce company Nykaa is also on the list of companies that did big on listing day with 77% premium. However, its good fortunes reversed as investors became concerned. Nykaa’s stock has tanked the most in the list by 39% in the last one year.

There are only two exceptions in the list that have continued their dream run — MTAR Technologies and Go Fashion which gave 33% and 18% returns respectively in the last one year.

Hyderabad-based MTAR Technologies is expected to nearly double its net profit by 96% in March quarter 2023 to ₹38.8 crore from ₹19.8 crore last year while its sales is also seen nearly doubling by 93% on year to ₹190.5 crore, as per a report by JM Financial.

The company has precision engineering capabilities to build nuclear and pressurised water reactors, aerospace engines, missile systems, aircraft components and many such other critical components and assemblies.

Meanwhile, Go Fashion, a women's apparel company that sells under the brand name Go Colors, has also continued to do well after a dazzling listing in 2021. The stock has gained 18% in the last one year.

Go Fashion has increased its net profit by 20% in the March quarter to ₹15 crore from ₹12 crore last year while sales rose 34% on year to ₹160 crore.

List of companies that gave highest listing day gains since 2021
Companies Issue price Close price on listing day % gains on the listing day % returns in 1 year
Sigachi Industries ₹163 ₹603.75 270%-1.83%
Paras Defence & Space Technologies ₹175 ₹498.75 185%-10%
Latent View Analytics ₹197 ₹488.60 148%-13%
Tatva Chintan Pharma Chem₹1,083 ₹2,310.25 113%-20%
Indigo Paints ₹1,490 ₹3,118.65 109%-9%
GR Infraprojects ₹837 ₹1,746.80 108%-29%
FSN E-Commerce Ventures (Nykaa)₹1,125 ₹2,206.70 96%-39%
MTAR Technologies₹575 ₹1,082.25 88%33%
Go Fashion (India)₹690 ₹1,252.60 81%18%
Clean Science & Technology₹900 ₹1,585.20 76%-15%
Source: Prime Database

So far in 2023, the IPO market has been very silent given only seven companies listed on the exchanges in the first four months of the year. However, this is expected to change soon, say analysts.

“Fast growing India-centric Mankind Pharma truly deserves credit for bringing back life into the primary market during CY 2023 with a stellar listing which provided a 30% return to retail investors. The icing on the cake was the allotment itself wherein almost all retail investors were allotted the shares,” said S Ranganathan, head of research at LKP Securities.

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