XTRAS: Paytm's IPO was the worst performed Indian IPO ever. Second spot goes to Rpower which was subscribed 72 times at issue size of 10,123 crore at price of Rs. 450/share. It got listed at Rs.372.5 with slump of 17%.
Raining IPOs, Draining Prices
The new decade is an ocean of opportunities for the Indian stock market. In the past 11 months of 2021, a figure of more than 51 IPOs has been listed, and many more are yet to be listed. The list may cross 60 by the year-end. The names include major players such as Paytm, Nykaa, Zomato, Indigo Paints, CarTrade, etc.
Why so many IPOs?
The pandemic last year delayed the plans of several companies going public – where they waited for the market to get in a strong position again. Ever since the onset of 2021, the effects of a pandemic on the economic sector decreased, giving companies a positive boost. Meanwhile, some of these companies also acquired the title of Unicorn – making it feasible for them to get listed on the market.
There is an aspect of government pumping money into the market to recover the economy from losses, along with the factor of investors making their investments in promising startups and companies due to good liquidity available in the market. Some contribution of several listings could also be placed upon the relaxations in listing norms offered by SEBI.
Unexpected Outcomes
With many newer companies, that are already making huge losses, applying for listing backing on the only hope that the bullish trend of the market will aid in their profitability, there happened some unexpected events.
Several of the highly promising IPOs, such that of Paytm, Reliance Power, Cairn India, etc. failed to meet the valuation figures and traded at discounted prices. Paytm’s One97 Communications Ltd. Has been the worst performer to date, crashing by 27.2% on a listing day. The next worse performer has a difference of approximately 10% in losses
