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Delightful year for IPO investors as 54 of 59 issues return 45% on average

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As much as 23 of the 59 issues rallied more than 50 per cent since listing and of them, nine gave more than two-fold gains over the issue price.

In a year when the key equity benchmarks scaled new highs and rallied nearly 20 per cent making investors richer by close to Rs 82 trillion, IPO investors laughed all the way to the bank as 55 of the 59 issues gave them handsome returns of 45 per cent on average.

In fact, 2023 turned out to be an outlier for primary market investors when 59 companies hit the street, raising Rs 54,000 crore, and returned over 45 per cent more than the issue prices on average, according to exchange data.

This means that more than two-thirds of companies outperformed benchmark indices which rallied close to 20 per cent in the year.

The average listing gain for all the 59 IPOs is 26.3 per cent and their average gain as of December 29 is 45 per cent and only four of the 59 main-board IPOs are traded below the issue price on the trading session of the year on December 29.

As much as 23 of the 59 issues rallied more than 50 per cent since listing and of them, nine gave more than two-fold gains over the issue price.

The best performer is the little-known Indian Renewable Energy Development Agency (Irdea) with a 221.3 per cent gain over the listing price of Rs 32 on the listing day on November 29. Irdea has given a 204 per cent return as of December 29. It is followed by Cyient DLM and Netweb Technologies with 154.5 per cent (over Rs 265 issue price) and 140.7 per cent returns over the issue price of Rs 500, respectively.

Tata Technologies, which was an FPO, is the second-best performer on the listing day with a threefold jump over the issue price of Rs 500 and is still up over 136 per cent. Realty player Signature Global has given 128 per cent over the listing price of Rs 385.

Such a listing spree also made Dalal Street the second best in the world in the year after China with 240 issues worth over USD 60 billion in fund raising.

Analysts say strong macroeconomic fundamentals, political stability, optimistic corporate earnings outlook, signals from the US Federal Reserve about three prospective rate cuts next year and heavy retail investors participation played a major role in fuelling the stock market rally in the year.

The year saw as much as 27 million new investors entering the market.

Capping all these factors is the huge overseas fund inflows, which scaled to Rs 1.7 trillion in the year.

The BSE IPO index gained a cool 41 per cent this year, thanks to a massive rally in the mid and small-cap stocks.

The record market activity — 59 main-board issues and 182 SME issues–in percentage terms means the total number of IPOs jumped 55.8 per cent on-year in 2023, the highest in the world.

The rally in the indices has brought another feather to Dalal Street in terms of market capitalization with a nearly USD 1 trillion addition to USD 4.3 trillion or Rs 370 trillion, up close to 30 per cent on-year, making it the eighth consecutive year of gains.

This had the investors turning richer by a whopping Rs 81.90 trillion in 2023 as a raft of positive factors powered a stellar rally in stocks. In contrast, investors became richer by Rs 16.38 trillion in 2022 as BSE barometer ended 2022 with a gain of 4.44 per cent.

Sensex reached its all-time high of 72,484.34 on December 28 after hitting a 52-week low of 57,084.91 on March 20, this year. The BSE bellwether made monthly gains in eight and lost in the remaining four during the year with November and December being the most rewarding jumping 4.87 per cent in November and rallying 7.83 per cent in December.

First Published: Dec 31 2023 | 3:04 PM IST


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