Ganesh Chaturthi 2024 IPO Frenzy: Over 80% of Listings Soar Above Issue Prices, 17 Turn Multibaggers

Ganesh Chaturthi 2024 marks the start of the festive season, and it’s a great time to reflect on the performance of Initial Public Offerings (IPOs). In the past year, the IPO market has shown remarkable results, with more than 80% of the listed IPOs trading above their issue prices. Impressively, 17 of these have turned into multibaggers, providing huge returns to investors.

The stock market has been reaching record highs, with the Nifty 50 and Sensex both performing strongly. This has drawn a lot of attention not only to the major IPOs but also to small and medium-sized enterprise (SME) IPOs. Despite warnings from SEBI (Securities and Exchange Board of India) about the risks of investing in SME IPOs, the S&P BSE SME IPO index has outperformed the Nifty 50 and Sensex, rising 169.42% in just one year.

According to Arun Kejriwal, founder of Kejriwal Research and Investment Services, the markets have benefited from a stable political and economic environment over the past year. This has led to a growing demand for capital, with many companies preferring to raise money through IPOs instead of borrowing from banks or other financial institutions. The momentum is expected to continue, as companies look to the capital markets for their growth and expansion needs.

In August 2024, IPO fundraising reached a 27-month high, with 10 companies raising nearly ₹17,047 crore. This made it the busiest month for IPOs since May 2022. Experts believe that the strong performance of IPOs has been driven by several factors, including positive regulatory changes, a strong domestic economy, increased participation from retail investors, and pent-up demand after a slow period during the pandemic.

80% of IPOs Trading Above Issue Prices
From September 1, 2023, to September 6, 2024, 87 companies were listed on the mainboard, and 81% of these are currently trading above their issue prices. Out of these, 17 companies have delivered multibagger returns, meaning their stock prices have more than doubled. Some of the top-performing IPOs include:

• Indian Renewable Energy Development Agency Ltd.: Gained over 600% since its listing.
• EMS Ltd.: Increased by 285.1%.
• Signatureglobal (India) Ltd.: Rose by 273.3%.
• Motisons Jewellers Ltd.: Gained 256.6%.
• Jyoti CNC Automation Ltd.: Increased by 250.1%.
• DOMS Industries Ltd.: Rose by 232.9%.

On the other hand, some companies have seen their stocks decline, with drops ranging from 1% to 37%. These include companies like Rishabh Instruments Ltd, Sai Silks (Kalamandir) Ltd, and IRM Energy Ltd.

Surge in Demat Accounts

The IPO boom has also led to a significant rise in demat accounts in India. According to data from the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), the number of demat accounts in the country crossed 17 crore by August 31, 2024. Although the stock market faced some volatility in August, nearly 42.3 lakh new demat accounts were opened during the month.

Will the IPO Boom Continue?

Experts believe that the IPO market is likely to remain active for the foreseeable future, depending on economic conditions, global markets, and other factors such as the outcome of the upcoming US elections. Mohit Gulati, CIO and managing partner at ITI Growth Opportunities Fund, thinks that access to capital markets has helped new businesses grow by raising equity capital, promoting private investment, and creating jobs. However, he cautions that the enthusiasm for SME IPOs could potentially affect mainboard listings if not managed carefully.