After a spectacular 2021, the current calendar year 2022, has not been a very successful year for the primary market till date. In the first 2 months of the year, only 5 companies have launched their initial public offerings (IPOs).
Of these 5 firms, only one is currently trading above its issue price, while the remaining have sunk below their IPO prices amid the ongoing market volatility.
Markets across the world have been reeling under pressure unnerved by the worsening Russia-Ukraine crisis resulting in crude oil at multi-year highs, weakening rupee, inflation concerns and an aggressive Fed rate hike outlook.
As a result, the benchmark indices have cracked 6 percent since February 24 when Russia started off its military operations to invade Ukraine and around 14 percent from record-high levels, hit on October 19, 2021.
The sentiment remained further weakened as foreign investors continued to remain net sellers since October 2021 on high valuation and expectation of rate hikes in the coming months. The ongoing geopolitical tensions further aggravated the foreign investor outflows. In March so far, the foreign investors have sold Indian equities worth ₹26,000 while since October 2021 this figure is around ₹2.1 lakh crore.
Among the stocks listed in 2022, Adani Wilmar is the only one trading above its issue price. The stock has risen 48 percent to ₹342 currently from its issue price of ₹230.
Meanwhile, other stocks Vedant Fashions, Precision Metaliks, AGS Transact Tech and Richa Info Systems that listed this year have performed poorly and are currently trading below their respective issue price.
Vedant Fashions is down around 3.5 percent from its issue price of ₹866 while Precision Metalicks is down nearly 12 percent from its IPO price of ₹51.
Further Richa Info Systems and AGS Transact have tanked 33 percent and 39 percent, respectively from their IPO prices of ₹125 and ₹175, respectively.
|Company||Issue Price (Rs)||CMP (Rs)||Returns (%)||Listing date|
|Adani Wilmar||230||342||48||Feb 8, 2022|
|Vedant Fashions||866||835||-3.5||Feb 16, 2022|
|Precision Metaliks||51||45||-11.7||Feb 1, 2022|
|Richa Info Systems||125||83||-33.6||Feb 21, 2022|
|AGS Transact Tech||175||106||-39.4||Jan 31, 2022|
Currently, investors are awaiting the mega LIC IPO, which received the Sebi nod to recover investor sentiment towards the primary markets. However, as per reports, it could also be delayed till the ongoing conflict is resolved to avoid market volatility.
As per the papers filed with Sebi, the issue is a 100 percent offer for sale for around 31.6 crore shares or a 5 percent stake of the firm. No fresh shares will be issued for the IPO. The government holds a 100 percent stake or over 632.49 crore shares in LIC. The face value of shares is ₹10 apiece.