Hyundai Motor IPO Shines, But 18 of Top 30 Indian IPOs Fail to Beat Nifty 500: Capitalmind Study Highlights Struggles of Giants Like Reliance Power

As Hyundai Motor India’s record-breaking IPO continues, a study by Capitalmind Financial Services has shown that 19 out of the top 30 IPOs by offer size have not delivered better returns than the Nifty 500 index.

The analysis found that 8 of these 30 companies have provided negative returns, with Reliance Power being the most notable failure. Once India’s biggest IPO when it launched in February 2008 with an offer size of ₹11,700 crore, Reliance Power’s stock price has dropped more than 80% from its issue price of ₹450.

Among the top 10 largest IPOs, only two have outperformed the Nifty 500. Coal India’s stock has doubled in value over the last 14 years, but it matches the returns of the index. Zomato is the only top 10 IPO that has significantly outpaced the index, offering substantial excess returns. Other successful IPOs in the top 30 include Hindustan Aeronautics, Indian Railway Finance Corp, Sona BLW Precision Forgings, and ICICI Lombard.

Recent IPOs Perform Better

Interestingly, five of the top 10 IPOs were launched in the past two years, benefiting from strong market conditions. Most of these recent IPOs, such as Bajaj Housing Finance, Bharti Hexacom, and Brainbees (First Cry’s parent company), have performed well.

Why Big IPOs Struggle

Anoop Vijaykumar, Head of Research at Capitalmind, pointed out that large IPOs often struggle to provide high returns because they tend to be overvalued during bull markets. When the expected earnings growth fails to match these high valuations and broader market corrections occur, high-profile IPOs typically deliver lower-than-expected returns.

Industry Trends

Traditionally, financial companies have raised the most funds through IPOs. In 2024, they accounted for 27% of the funds raised. However, consumer companies—both cyclical and non-cyclical—have taken the lead this year, contributing 34% of the total funds raised, followed by financials at 27%, and industrials at 14%.