Eleven stocks, including the mega Life Insurance Corporation (LIC), have been listed in the current financial year (FY23) till date. Among these listed at a premium while the remaining 3 are at a discount.
However, only 4 of those 8 IPOs rose in double-digit in their market debut, while the remaining, were listed at a premium of less than 5 percent in their respective debuts.
According to market experts, the volatility in the secondary market has led to a decline in demand in the primary market. The poor performance of firms during listings is mainly due to overall weak market sentiment on the back of foreign investor outflows which have been continuing since October last year. Further, inflation, global developments like the Russia-Ukraine War, and Fed policy tightening has also impacted the sentiment.
“The IPO momentum of a blockbuster 2021 has not carried over to 2022 so far. Issuance and proceeds are well off last year's pace, as geopolitical uncertainty along with other macro factors continues to affect investor sentiment,” said Sandip Khetan, Partner and Financial Accounting Advisory Services Leader, EY India said in a report.
Hariom Pipe Industries, which was listed on April 13, 2021, witnessed the biggest rise in its debut. The stock listed at ₹214, at around a 40 percent premium from its issue price of ₹153. It was followed by Campus Activewear, which listed at ₹355, a 22 percent premium to its issue price of ₹292.
Meanwhile, Uma Exports listed at ₹80, a 17 percent premium to its issue price of ₹68, while Veranda Learning solutions listed at ₹157, a 15 percent premium to its issue price of ₹137 and Vedant Fashions listed at an 8 percent premium to its issue price of ₹866, at ₹936.
Apart from these, in the latest listings, especially the ones post the mega LIC, Prudent Corporate Advisory, Pradeep Phosphates, Venus Pipes, and Delhivery listed at less than 5 percent premium to their respective issue prices.
Among discount listings, LIC listed at ₹867, a discount of 8.6 percent from its issue price of ₹949 since April followed by Rainbow Childrens Medicare, which listed at a 6.6 percent discount and Ethos, which listed at a 5.5 percent discount from its issue price of ₹878, at ₹830.
"The weak listings come on the back of a range of issues, including geopolitical tensions, stock market volatility, price correction in over-valued stocks from recent IPOs, growing concerns about a rise in the commodity and energy prices, the impact of inflation and potential interest rate hikes and COVID-19 induced lockdown, a report by global accounting firm EY noted.