Three big IPOs shine in listless market in 2013

Tags: IPO, SME, Companies

31 issues raise Rs 3,320 crore through IPOs on SME platform

The only three IPOs that hit the market in 2013 have given exceptional returns.

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They are from JustDial, Repco Home Finance and V-Mart.

JustDial, which hit the market at Rs 530 a share, is now trading at Rs 1,386, a premium of 161 per cent. Its issue in June itself was a big success.

After that the year has seen no IPOs, except on the SME exchanges, not meant for small investors. The Repco Home Finance IPO had come in March and V-Mart Retail in February.

The Repco issue was priced at Rs 172 a share; it is now trading at Rs 352, a gain of 102 per cent. Similarly, V-Mart came in at Rs 210 apiece and is now trading at Rs 235, a gain of nearly 12 per cent.

The performance is in sharp contrast to IPOs in the previous years. According to a Sebi study, if an investor had invested Rs 100 each in the 52 IPOs in 2010-11, his holdings will be worth Rs 2,898 today, indicating a loss of 55 per cent.

Similarly, if he had put Rs 100 each in the 31 issues in 2011-12, the worth of his holdings would have shrunk to just Rs 1,610, a loss of 52 per cent.

Including on the SMEs, 2013-14 till November saw only 31 issues, raising Rs 3,320 crore through IPOs and rights issues. Recently, a Sebi official said that with a savings rate of 30 per cent, there was enough money out there but high-priced IPOs were failing to tap it.

Prithvi Haldea of Prime Database, said at a recent event that since April 1, 2009 public share offerings worth Rs 71,200 crore had been allowed to lapse or withdrawn.

This calendar year two companies entered the market but withdrew their issues midway following poor investor response. They were Sai Silks (Kalamandir), which pulled out its issue in February, and Scotts Garments, which withdrew its issue in May.

According to Prime Database, since 2009 the market has seen Rs 71,113 crore being mopped up. With favourable conditions, this amount would have been over Rs 1,50,000 crore.

rajeshabraham@mydigitalfc.com

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