The small and medium-sized enterprise (SME)IPO segment has been experiencing unprecedented buzz. There have been around 100 SME IPOs listed as of May 2024.
Analysts believe that the rise in IPO activity has been driven by the strong economic development, rising Indian stocks, and consistently exceeding expectations of company earnings, which encourages more companies to go public. The IPO market has benefited greatly as a consequence, and new –age companies like Tata Capital, Hexaware, Ola Electric, and Swiggy are lining up for their 2024–2025 public market debuts.
“The primary market witnessed 30 mainboard IPOs till May this year. These 30 companies raised around ₹30,000 crore. In 2024, Bharti Hexacom ( ₹4275 Cr), Aadhar Housing Finance ( ₹3000 Cr) and Go Digit General Insurance ( ₹2615 Cr) were among the large-sized IPOs so far during the first half of 2024. Amidst general elections, the primary market continues to remain vibrant, with a solid response to certain IPOs,” added Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Pvt Ltd.
10 mainboard IPO stocks trading below their issue price
Of the 30 mainboard initial public offerings (IPOs) that made their debut in 2024, ten—Capital Small Finance Bank Ltd, Popular Vehicles and Services Ltd, EPack Durables Ltd, GPT Healthcare Ltd, Gopal Snacks Ltd, Entero Healthcare Solutions Ltd, SRM Contractors Ltd, R K Swamy Ltd, J G Chemicals Ltd, and Rashi Peripherals Ltd—have been trading below their issue price or IPO price.
According to Dr. Ravi Singh, SVP, Retail Research, Religare Broking Ltd, despite market corrections driven by global economic uncertainty and election-related volatility, the fundamentals of these companies remain strong. Investors are advised to hold existing positions, given the solid business models and growth potential. For new entries, waiting for post-election stability is recommended to capitalise on future growth opportunities.
| Company Name | Listing Date | Issue Size | Issue Price | Total Subscription | Listing Close (Rs) | LTP (Rs) | Current Gain (%) |
| Capital Small Finance Bank Ltd. | 14 Feb `24 | 523.1 Cr |
₹ 468 |
4.0x | 435.0 | 329.5 | -29.6% |
| EPack Durables Ltd. |
30 Jan `24 |
640.0 Cr | ₹ 230 | 16.4x |
207.6 |
171.9 | -25.3% |
| Popular Vehicles and Services Ltd. | 19 Mar `24 | 601.5 Cr | ₹ 295 | 1.2x | 276.1 | 221.9 | -24.8% |
| GPT Healthcare Ltd. |
29 Feb `24 |
525.1 Cr |
₹ 186 |
8.5x |
200.7 |
143.9 |
-22.6% |
| Gopal Snacks Ltd. |
14 Mar `24 |
650.0 Cr |
₹ 401 |
9.0x |
362.7 |
316.5 | -21.1% |
| Entero Healthcare Solutions Ltd. | 16 Feb `24 | 1,600.0 Cr |
₹ 1258 |
1.5x | 1,149.5 | 1,028.3 | -18.3% |
| SRM Contractors Ltd. |
03 Apr `24 |
1,30.2 Cr |
₹ 210 |
86.6x | 226.0 | 175.3 | -16.5% |
| R K Swamy Ltd. |
12 Mar `24 |
423.6 Cr |
₹ 288 |
25.9x | 262.6 | 275.6 | -4.3% |
| J G Chemicals Ltd. |
13 Mar `24 |
251.2 Cr |
₹ 221 |
27.8x | 184.8 | 215.4 | -2.5% |
| Rashi Peripherals Ltd. |
14 Feb `24 |
600.0 Cr |
₹ 311 | 59.7x |
321.5 |
305.6 | -1.7% |
| Source: trendlyne |
As compared to its IPO price of ₹468, Capital Small Finance Bank share price has fallen by 30%. Listed at ₹435 at the closing price, the Capital Small Finance Bank IPO had a lackluster launch on the exchanges in February. Capital Small Finance Bank IPO was subscribed 4 times on the last day of bidding.
Similarly, since its debut, shares of Gopal Snacks, Popular Vehicles and Services, GPT Healthcare, and EPack Durables have all plummeted by more than 20%.
Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities highlighted that among the recently listed IPOs, R K Swamy can be a good pick for a long term investor considering a pure play-on business model which has a single window marketing solution for creative media data analytics and market research services. R K Swamy has over 50 years of track record in integrated marketing and allied services.
Also Read: Biggest IPOs on US exchanges this year come from non-US firms. Check details here…
IPO market – Road Ahead
According to Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Pvt Ltd, looking ahead, the market is set to welcome several more IPOs, with expectations running high for their success.
The market cap of BSE-listed companies recently hit a historic milestone, exceeding $5 trillion for the first time. This achievement can be attributed to various key factors. A strong rally in core sectors has played a significant role, driven by substantial growth and strong investor interest. Additionally, positive economic indicators and a favourable long-term outlook have further strengthened the market sentiment. Trends in foreign investment and strong investor confidence have also contributed to this unprecedented market cap, reflecting the overall robustness and resilience of the Indian economy.
Also Read: Hero FinCorp IPO: Hero MotoCorp arm to raise ₹4,000 crore via IPO
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 31 May 2024, 05:00 PM IST
