Capitalmind Financial Services studied the top 30 IPOs by offer size in India and the returns the investors made by investing in it compared to returns from the Nifty 500 index.
What Happened: The study shows that 18 out of 30 IPOs failed the beat the Nifty 500's return. 8 out of 30 IPOs have generated negative returns. The companies that have given negative returns include Paytm, Reliance Power, SBI Cards, Star Health and Allied Insurance, Delhivery and Bandhan Bank.
Companies like NHPC, NTPC and LIC have made positive returns but failed to beat the Nifty 500 index.
Zomato and Coal India are the 2 companies among the top 10 in size that have generated index-beating returns. While Coal India has doubled in price since the IPO — and the performance gets better with dividends — it only outperformed the Nifty 500 by a little bit, the study notes.
Coal India shares have risen 101% since its inception in 2010 while including dividends, the total returns of the stock reached 443%. Compared to this, the Nifty 500 gave a return of 435% in the same period.
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| Effective Date | Issuer Name | Industry | Offer Size (₹ Cr) | Offer Price ₹ | Price Return to Date* | Total Return to Date* | CNX500 Return | Beat CNX500 |
|---|---|---|---|---|---|---|---|---|
| May ’22 | Life Insurance Corp of India | Financial | 20,557 | 949 | 0 | 2 | 70 | No |
| Nov ’21 | Paytm | Consumer, Non-cyclical | 18,300 | 2,150 | -66 | -54 | 54 | No |
| Apr ’10 | Coal India | Energy | 15,475 | 245 | 101 | 443 | 435 | Beat |
| Feb ’08 | Reliance Power | Utilities | 11,700 | 450 | -84 | -81 | 961 | No |
| Oct ’17 | General Insurance Corp of India | Financial | 11,373 | 912 | -14 | -2 | 161 | No |
| Mar ’17 | SBI Cards & Payment Services | Financial | 10,355 | 755 | -3 | -2 | 211 | No |
| Nov ’17 | New India Assurance | Financial | 9,600 | 800 | -48 | -44 | 160 | No |
| Jul ’21 | Zomato | Communications | 9,375 | 76 | 265 | 265 | 73 | Beat |
| Nov ’17 | HDFC Life Insurance | Financial | 8,695 | 290 | 150 | 155 | 158 | No |
| Oct ’17 | SBI Life Insurance | Financial | 8,386 | 700 | 148 | 152 | 206 | No |
| Sep ’24 | Bajaj Housing Finance | Financial | 6,560 | 70 | 116 | 116 | -2 | Beat |
| Nov ’20 | Gland Pharma | Consumer, Non-cyclical | 6,480 | 1,500 | 13 | 14 | 124 | No |
| Dec ’21 | Star Health & Allied Insurance | Financial | 6,401 | 900 | -39 | -39 | 53 | No |
| Sep ’24 | Ola Electric Mobility | Consumer, Cyclical | 6,146 | 76 | 19 | 19 | 19 | Beat |
| Sep ’16 | ICICI Prudential Life Insurance | Financial | 6,057 | 334 | 122 | 133 | 222 | No |
| Sep ’09 | NHPC | Utilities | 6,039 | 36 | 153 | 389 | 961 | No |
| Nov ’21 | PB Fintech | Technology | 5,710 | 980 | 67 | 67 | 51 | Beat |
| Sep ’17 | ICICI Lombard General Insurance | Financial | 5,701 | 661 | 213 | 226 | 177 | Beat |
| Jun ’21 | Sona Blw Precision Forgings Ltd | Consumer, Cyclical | 5,667 | 291 | 129 | 132 | 75 | Beat |
| May ’04 | NTPC | Utilities | 5,368 | 62 | 718 | 1,398 | 1,555 | No |
| Nov ’21 | FSN E-Commerce Ventures | Communications | 5,352 | 1,125 | 2 | 2 | 53 | No |
| May ’22 | Delhivery | Industrial | 5,236 | 487 | -16 | -16 | 72 | No |
| Aug ’21 | Nuvoco Vistas Corp | Basic Materials | 5,000 | 570 | -37 | -37 | 70 | No |
| Jan ’21 | Indian Railway Finance Corporation | Industrial | 4,633 | 26 | 486 | 582 | 109 | Beat |
| Mar ’18 | Bandhan Bank Ltd | Financial | 4,473 | 375 | -44 | -43 | 163 | No |
| May ’23 | Mankind Pharma Ltd | Consumer, Non-cyclical | 4,326 | 1,080 | 159 | 159 | 37 | Beat |
| Apr ’24 | Bharti Hexacom | Communications | 4,275 | 570 | 154 | 155 | -1 | Beat |
| Aug ’24 | BrainBees Solutions | Communications | 4,191 | 465 | 47 | 47 | 4 | Beat |
| Mar ’18 | Hindustan Aeronautics | Industrial | 4,144 | 1,215 | 632 | 787 | 165 | Beat |
| Dec ’12 | Indus Towers | Communications | 4,090 | 210 | 80 | 161 | 398 | No |
Zomato's shares have risen 265% since its debut compared to Nifty 500's 73% return in the same period.
Other big winners who have generated good returns are Hindustan Aeronautics, Indian Railway Finance Corporation, Sona BLW Precision Forging and ICICI Lombard.
Anoop Vijaykumar, Investments & Head of Research, Capitalmind Financial Services said, "Overall, big IPOs have struggled to deliver excess returns for the investors. IPOs abound in bull markets since they get optimistic valuations and most late-stage bull markets are characterised by a few large IPOs which tend to be valued optimistically. When the earnings growth to justify those valuations does not materialise combined with a mean-reversion in broader markets, high-profile IPOs end up delivering lower than expected returns."
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