IPO Shock: 18 of Top 30 Largest IPOs Fail to Beat Nifty 500, Including LIC, Paytm, and Reliance Power – Capitalmind Report

A recent report by Capitalmind Financial Services reveals that 18 out of the 30 largest IPOs have failed to outperform the Nifty 500 index. The study, conducted by the Bengaluru-based wealth management firm led by Deepak Shenoy, shows that these IPOs did not deliver better returns than the index.

Some of the IPOs that underperformed include big names like Life Insurance Corp of India (LIC), One 97 Communications (Paytm), Reliance Power, SBI Cards & Payment Services, and HDFC Life Insurance, among others. Out of these 30 companies, 8 have given negative returns, with Reliance Power being the most significant disappointment.

Anoop Vijaykumar, Head of Research at Capitalmind, noted that large IPOs often struggle to give excess returns. During bullish market periods, many IPOs get high valuations, but when earnings fail to meet expectations, these IPOs tend to deliver lower-than-expected returns.

The study also considered the impact of dividends, assuming they were reinvested in the stock. Out of the top 10 IPOs, only 2 managed to give better returns than the Nifty 500. Coal India, for example, nearly doubled its stock price over 14 years, but its performance improved mostly because of dividends.

Zomato stands out as one of the few top IPOs that have provided significant returns. Other top-performing stocks among the 30 largest IPOs include Hindustan Aeronautics, Indian Railway Finance Corp, Sona BLW Precision Forgings, and ICICI Lombard.

In the last two years, five of the top 10 IPOs were launched, and some, like Bajaj Housing Finance, Bharti Hexacom, and Brainbees (First Cry), have shown strong growth due to favorable market conditions.