IPOs in FY24: 75 issues launched; 5 stocks including IREDA, Netweb soared over 150% since listing

The financial year 2024 (FY24) was a great year for initial public offerings (IPOs) with 75 issues launched in the year, the highest in 2 years. The strong demand for equities, propelled by the increasing number of domestic investors, laid the foundation for heightened activity in the primary market.

Throughout the year, some of the most anticipated IPOs, such as Tata Technologies, IREDA, JSW Infra, and Cello World, among others, made their debut in the primary markets. Most IPOs this year garnered substantial subscriptions and witnessed positive movements on their listing days.

Read here: Indian stock exchanges topped in number of IPOs in 2023: EY Report

Moreover, equity fundraising through IPOs, as well, witnessed a notable 20 percent increase in FY24. A total of 75 firms raised ₹61,915 crore through main board IPOs during this period, up significantly from the ₹52,116 crore raised by 37 IPOs in the previous fiscal year 2022-23.

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IPO performance

Over 50 of the 75 IPOs are currently trading above the issue price with an average return of 65 percent. 5 of these 75 IPOs have soared over 150 percent from their issue prices.

With a robust financial performance post listing, IREDA has generated over 4x returns over the issue price, showcasing its strong momentum in spearheading the renewable energy boom in the country through financing. Following closely behind are Signature Global, up 244 percent and Netweb Technologies, up 200 percent. Meanwhile, Cyient DLM has also jumped 160 percent whereas Motisons Jewellers has rallied over 150 percent. Azad Engineering and Senco Gold are some other IPOs that have also given multibagger returns.

The highly anticipated Tata Technologies, which marked a significant return of the Tata Group to the IPO market after almost two decades, has proven to be a success story. The stock is presently trading at an impressive 106 percent above its issue price.

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However, amidst the enthusiastic investor sentiment and a thriving primary market, the fiscal year also witnessed some companies struggling to meet public expectations post listing. Among the notable underperformers are HMA Agro Industries, trading a substantial 91 percent below its issue price, followed by Credo Brands Marketing, down 36 percent, Muthoot Microfin, down 32 percent and Epack Durables, down 30 percent.

Other important facts

> In the realm of mainboard IPOs, Mankind Pharma emerged as the largest player, raising ₹4,326 crore, closely followed by JSW Infrastructure with ₹2,800 crore.

> On the other end of the spectrum, Plaza Wires conducted the smallest IPO, securing ₹71 crore.

> Notably, the average deal size experienced a significant reduction from ₹1,409 crore in FY23 to ₹815 crore in FY24.

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> Out of the 75 IPOs, 54 IPOs were subscribed more than 10 times, with 22 of them witnessing subscriptions exceeding 50 times.

> The average number of retail applications surged to 13 lakh , marking a substantial increase from approximately 6 lakh in the previous fiscal year.

> The Tata Technologies IPO attracted the highest number of retail applications, totaling 52 lakh, trailed by DOMS Industries with 41 lakh applications, and INOX India with 37 lakh bids.

Read here: FY24 Market Review: Nifty 50 jumped 30%; 5 stocks delivered returns over 100%

> The average listing gains experienced a notable increase to 29 percent in FY24, compared to 9 percent in the preceding financial year.

> Out of the 75 IPOs, 48 yielded returns exceeding 10 percent. Notably, Vibhor Steel achieved the most significant day-one pop, soaring by 193 percent, closely followed by BLS E-Services with a remarkable 175 percent increase, and Tata Technologies with an impressive 163 percent surge.

> During FY24, a total of 96 companies submitted their offer documents to the market regulator Securities and Exchange Board of India (SEBI), representing an increase from 75 companies in the previous financial year.

Read here: Multibagger: Up over 600%, penny stock HLV turned ₹10,000 into ₹73,600 in 4 years

Outlook

Experts believe that the robust momentum witnessed in the primary market is expected to continue into the next financial year. Even with the elections slated ahead, the strong IPO trend is likely to be maintained.

Trivesh D, COO, Tradejini, noted that the current IPO trend is not indicating a slowdown, with IPOs worth approximately ₹60,000 crore lined up in 2024. Also, the upcoming elections could potentially boost market sentiment and IPO activity if the outcome is favourable, he added.

"Given the favourable macroeconomic conditions, including the expected GDP growth and India’s manufacturing story, I feel retail investors should not miss out on the opportunity of these IPOs but be selective and cautious in their approach. It is also important to note that IPOs are not the only way to enter the market, and FOMO usually takes the better, of rational investment decision-making and leads to regret later. Retail investors, investing their hard-earned money need to be confident of the Company and its fundamentals which should act as the base of their decision-making and not other factors such as grey market premium and FOMO-driven stocks," the expert advised.

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Meanwhile, global brokerage house Jefferies also sees the strong IPO trend continuing. According to Jefferies, the timing seems favorable for global multinational companies to contemplate listing in India. As an example, Hyundai India, which has been established for nearly three decades, recently disclosed its plans for listing in India. This move could potentially set the stage for numerous other multinational companies with significant market shares in India that are yet to be listed in the Indian market.

It further pointed out that over the past decade, India's Internet economy has fostered over 100 unicorns, establishing itself as the world's third-largest unicorn hub, following the US and China. Successful listings of startups such as Zomato, Nykaa, PBFintech, EaseMyTrip, InfoEdge, and Honasa Consumers exemplify this trend. Additionally, Flipkart, Swiggy, Ola Electric, and PhonePe are anticipated to join the list soon. Moreover, the demerger of Reliance Jio and Reliance Retail from Reliance Industries is poised to unlock significant value, offering further investment opportunities.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decision.