A great year for IPO investors, as 54 of the 59 issues yield an average of 45%

In a year when major equity benchmarks hit new highs and rose nearly 20 percent, making investors nearly Rs 82 trillion richer, IPO investors laughed at the bank as 55 of the 59 issues gave them handsome returns of 45 percent. average.

In fact, 2023 proved to be a blip for primary market investors as 59 companies hit the streets, raised Rs 54,000 crore, and raised an average of over 45 percent more than issue prices, according to exchange data.

This means that more than two-thirds of companies outperformed the benchmark indices, which rose almost 20 percent this year.

The average listing gain for all 59 IPOs is 26.3 percent and their average gain as of December 29 is 45 percent and only four of the 59 mainboard IPOs are trading below the issue price during the December trading session of the year. 29.

As many as 23 of the 59 issues rose by more than 50 percent since listing, and of those, nine delivered more than double the gain compared to the issue price.

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

Tata Technologies, an FPO, is performing in second place on the trading day with a three-fold increase from its issue price of Rs 500 and is still up over 136 percent. Real estate player Signature Global has given 128 percent on the list price of Rs 385.

Such an IPO also made Dalal Street the second best in the world in the year after China with 240 issues worth more than $60 billion in fundraising.

Analysts say strong macroeconomic fundamentals, political stability, optimistic corporate earnings prospects, signals from the US Federal Reserve about three expected rate cuts next year and heavy retail investor participation played a major role in fueling the year's stock market rally.

That year, no fewer than 27 million new investors entered the market.

Limiting all these factors is the huge inflow of foreign funds, which amounted to Rs 1.7 trillion in the year.

The BSE IPO index has gained a handsome 41 percent this year, thanks to a huge rally in mid- and small-cap stocks.

The record market activity – 59 motherboard issuances and 182 SME issuances – means in percentage terms that the total number of IPOs in 2023 is up 55.8 percent from the previous year, the highest in the world.

The rally in the indices has given Dalal Street yet another boost in terms of market capitalization, adding nearly $1 trillion to $4.3 trillion or 370 trillion rupees, an increase of almost 30 percent year-on-year, making it the eighth consecutive year is profits.

This made investors a whopping Rs 81.90 trillion richer in 2023 as a series of positive factors fueled a stellar rally in equities. In contrast, investors became richer by Rs 16.38 trillion in 2022 as the BSE barometer ended 2022 with a gain of 4.44 percent.

Sensex hit 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 indicator posted monthly gains on eight and losses on the remaining four during the year, with November and December being the most rewarding with a gain of 4.87 percent in November and a rise of 7.83 percent in December.

First print: December 31, 2023 | 3:04 PM IST