IPO

IPO Boom in 2024: Gains on Listing Day, But Challenges in Sustaining Momentum

As 2024 draws to a close, the Indian IPO market has seen a remarkable surge in activity. However, a recent analysis by ETIG reveals a contrasting picture: while most IPOs achieved significant listing gains, many struggled to sustain or build on those initial successes.

IPO Whatsapp Update Join Now! 

Key Findings: IPO Gains and Sustainability

Of the 81 companies that debuted on the mainboard in 2024 (as of December 20), 48 companies—more than half—recorded listing gains of 10% or more. However, only 20 companies managed to either retain or improve these gains in subsequent trading sessions.

Here’s a deeper look at the trends:

  • 33 companies reported listing gains of 25% or more, but just 9 of them successfully retained or extended those gains over time.
  • Of the 62 companies that listed above their offer price, 26 companies failed to show any gains as of December 24.

The analysis did not account for the duration these companies have been traded on exchanges. This means that stocks with a shorter trading history—such as a week or a month—may demonstrate a different trajectory in the future.

Record Year for Primary Market Issuance

Despite challenges in retaining listing gains, 2024 has been a landmark year for IPO activity, driven by a buoyant secondary market for most of the year and strong participation from foreign portfolio investors (FPIs).

Key statistics include:

  • ₹1.5 lakh crore raised through mainboard IPOs (excluding SME listings) in 2024, compared to just ₹50,000 crore in 2023.
  • As of December 24, the aggregate listing day market capitalization of companies in 2024 stood at ₹12.8 lakh crore, marking a 10% increase.
  • FPIs invested around ₹1.2 lakh crore in the primary market, even as they turned net sellers in the secondary market, offloading equities worth ₹1.1 lakh crore over the past three months.

Biggest Winners of 2024

Several IPOs delivered stellar returns on listing day:

  1. Vibhor Steel Tubes: The standout performer with a 179% listing gain.
  2. BLS E-Services: Recorded a 129% gain.
  3. Premier Energies: Posted an impressive 120% gain.

Looking Ahead: Investor Caution Amid the Boom

While 2024 has been a record-breaking year in terms of funds raised, the challenges in sustaining listing gains highlight the need for investors to tread cautiously. Companies that have been listed for only a short period may show changing trends in stock performance as time progresses.

The IPO market’s dynamism, fueled by strong demand and robust participation from FPIs, underscores its potential. Yet, the struggle to retain listing gains serves as a reminder that initial success doesn’t always translate to long-term performance. Investors must focus on fundamentals and broader market conditions while navigating the IPO landscape.

Leave a Reply

Your email address will not be published. Required fields are marked *