The year 2010 has seen a spate of IPOs from companies trying to cash in on the booming stock markets and more than 20 companies have filed their red herring prospectuses with market regulator Securities and Exchange Board of India (SEBI).
While some of them have burnt investors’ fingers, others have something to cheer about. As on 16 April 2010, 27 companies have entered the market this year including follow-on public offers (FPOs) from public sector utilities NTPC Ltd and Rural Electrification Corporation Ltd (REC). Among them, 16 stocks have left something on the table for investors when compared to their issue price while 11 stocks are in a freefall. From these, the top 10 performing stocks have gained an average of 56.42%.
Two IPOs have yielded more than 100% returns. These are ARSS Infrastructure Projects Limited and Jubilant Foodworks Ltd, which jumped 158% and 119% from their issue price. ARSS was issued at Rs450 while Jubilant was issued at Rs145. Aqua Logistics Ltd (73%), Birla Shloka Edutech Ltd (41%), DQ Entertainment (International) Ltd (32.19%), Man Infraconstruction Ltd (27.78%) and JSW Energy Ltd (27.74%) are trading well above their offer price, as well.
In the year 2009, 18 IPOs hit the market. Out of them, eight stocks are trading below their issue price while the balance 10 are trading above their offer price. Edserv Softsystems Ltd, which debuted on 2 March 2009 at Rs60, has shot up 249% at Rs209.10 as on 6 May 2010. Interestingly, the Edserv IPO was graded 1/5 by ratings agency CARE.
Mahindra Holidays and Resorts India Ltd, which was listed on 16 July 2009 at an issue price of Rs300, is up 58%. It closed at Rs473.05 in yesterday’s trading session. Cox & Kings (India) Ltd has also given a decent return of 42% from its offer price of Rs330; it closed at Rs468.15 yesterday. Similarly, Pipavav Shipyard Ltd has surged 41% at Rs81.95 from its offer price of Rs58.
The BSE Sensex is up by 95% since March 2009.
Rishabhdev Technocable Ltd has disappointed investors the most as it dived 73% from its offer price of Rs33. The stock closed at Rs8.81 on the BSE today. Euro Multivision Ltd (-66%), Raj Oil Mills Ltd (-50.33%), Excel Infoways Ltd (-43%), Astec LifeSciences Ltd (-31%) and Indiabulls Power Ltd (-33%) have slipped from their offer prices of Rs75, Rs120, Rs85, Rs82, and Rs45, respectively.— Ravi Samalad