Investors who betted on initial public offerings (IPOs) this year have not been disappointed. Close to three-fourths of the companies — 17 of 25 — listed in the calendar year (CY) 2016 so far are trading above their issue prices. The stock of Infibeam, which is engaged in online retailing and e-commerce services, is trading 159% above its issue price, making it the best performer among companies.Infibeam is one of the few profitable e-commerce companies, though it is much smaller than Flipkart and Snapdeal.
For the quarter ended September 2016, the company posted revenues worth R16.59 crore against Rs 10.86 crore in the June quarter. However, its net profit fell from Rs 21.04 crore in June 2016 to Rs 6.40 crore in September.
Among other top performers are Advanced Enzymes, whose stock is trading almost 140% higher than the issue price, as well as Quess Corp, Equitas Holdings, Mahanagar Gas, RBL Bank, Thyrocare and Parag Milk Food, which are trading between 50 to 100% higher.
On the other hand, however, marquee names like ICICI Prudential, L& T Infotech and L& T Technology Services have given negative returns to investors. Shares of ICICI Prudential, whose IPO was the biggest in the last six years, have dropped 10% from its issue price of R334. After listing 6% down over the issue price, L&T Infotech is currently trading around 40% below its issue price, while L&T Technology Services has dropped nearly 2.85% from its issue price of R860.
In CY 2016 so far, 25 companies have raised Rs25,163.33 crore through IPOs, a near twofold jump from CY2015 when companies raised Rs13,614 crore, data from Prime Database revealed. This is the highest amount raised through IPOs in the last six years.
Narayanan Sadanandan, executive vice-president of SBI Capital Markets, said demonetisation has dampened retail investors’ enthusiasm in IPOs. “After demonetisation, the retail portion has not subscribed the way it was before November. We need to watch how swiftly the economy recovers from demonetisation woes. Other events like issues in the eurozone and the upcoming Union Budget also need to be seen,” he said.
The Sensex has gained 1.5% in 2016 so far. However, it fell 3.8% since November 8, 2016, when the central government announced its decision to demonetise R500 and R1,000 notes. On Monday, the Sensex closed at 26,515.24, down 0.87%, and Nifty50 ended the session at 8,170.80, down 1.10%.