Capitalmind Financial Services Pvt. Ltd. has conducted an in-depth analysis of the top 30 IPOs by offer size and their returns in comparison to the CNX500 index. This analysis includes the price returns and total returns an investor would have achieved if they had bought the stock at the IPO price and reinvested any dividends.
According to the study, 18 of the top 30 IPOs by offer size have failed to generate excess returns over the CNX500 index. Eight of the top 30 IPOs delivered negative returns, with Reliance Power being the most high-profile underperformer. Zomato, one of the top 10 IPOs, has delivered meaningful excess returns, along with winners like Hindustan Aeronautics, Indian Railway Finance Corporation, Sona BLW Precision Forgings, and ICICI Lombard.
Interestingly, five of the top 10 IPOs have come in the last two years, and they have shown promising performance. IPOs like Bajaj Housing Finance, Bharti Hexacom, and Brainbees (FirstCry) have benefited from a favorable market environment.
Key Insights:
- 18 of the 30 top IPOs underperformed relative to the CNX500.
- Reliance Power was the largest underperformer.
- Zomato is one of the few top IPOs to deliver significant excess returns.
- Recent IPOs like Bajaj Housing Finance and Ola Electric Mobility show positive performance due to favorable market conditions.
Anoop Vijaykumar, Investments & Head of Research at Capitalmind Financial Services, commented:
“Overall, large IPOs have often struggled to deliver excess returns for investors. IPOs tend to be concentrated in bull markets, where optimistic valuations may not always materialize into the expected earnings growth, leading to underperformance in the longer term.”
The dominance of Financials in IPO fundraising has continued into 2024, accounting for 27% of funds raised. However, Consumer companies (both cyclical and non-cyclical) have now taken the lead, contributing 34% of the total funds raised in 2024, followed by Industrials at 14%.
Top 30 IPOs by Offer Size and Returns
| Effective Date | Issuer Name | Industry | Offer Size (₹ Cr) | Price Return (%) | Total Return (%) | Beat CNX500? |
|---|---|---|---|---|---|---|
| May ’22 | Life Insurance Corp of India | Financial | 20,557 | -22 | 70 | No |
| Nov ’21 | One 97 Communications (Paytm) | Consumer, Non-cyclical | 18,300 | -51 | 54 | No |
| Apr ’10 | Coal India | Energy | 15,475 | 107 | 443 | Beat |
| Feb ’08 | Reliance Power Ltd | Utilities | 11,700 | -94 | -94 | No |
| Oct ’17 | General Insurance Corp of India | Financial | 11,373 | -34 | 58 | No |
| Mar ’20 | SBI Cards & Payments Services | Financial | 10,355 | 50 | 211 | No |
| Nov ’17 | New India Assurance Ltd | Financial | 9,587 | -48 | 44 | No |
| Jul ’21 | Zomato Ltd | Consumer, Cyclical | 9,375 | 47 | 73 | Beat |
| Oct ’17 | HDFC Life Insurance Co | Financial | 8,695 | 30 | 129 | No |
| Sep ’24 | Bajaj Housing Finance Ltd | Financial | 6,650 | 50 | 50 | Beat |
| Dec ’21 | Star Health & Allied Insurance Co | Financial | 6,401 | -39 | 53 | No |
| Sep ’24 | Ola Electric Mobility Pvt Ltd | Consumer, Cyclical | 6,146 | 24 | 136 | Beat |
| Sep ’16 | ICICI Prudential Life Insurance Co | Financial | 6,057 | 30 | 133 | No |
| Nov ’09 | NHPC Ltd | Utilities | 6,039 | 81 | 361 | Beat |
| Nov ’21 | PB Fintech Ltd | Technology | 5,826 | -47 | 51 | No |
| Sep ’17 | ICICI Lombard General Insurance | Financial | 5,701 | 91 | 226 | Beat |
| Jun ’21 | Sona BLW Precision Forgings Ltd | Consumer, Cyclical | 5,667 | 77 | 75 | Beat |
| May ’04 | NTPC Ltd | Utilities | 5,536 | 82 | 1,398 | Beat |
| Nov ’21 | FSN E-Commerce Ventures (Nykaa) | Communications | 5,352 | -17 | 56 | No |
| May ’22 | Delhivery Ltd | Communications | 5,235 | -10 | 52 | No |
| Aug ’21 | Nuvoco Vistas Corp Ltd | Basic Materials | 5,000 | 42 | 33 | No |
| Jan ’21 | Indian Railway Finance Corp | Industrial | 4,633 | 80 | 582 | Beat |
| Mar ’18 | Bandhan Bank Ltd | Financial | 4,473 | 43 | 163 | No |
| May ’23 | Mankind Pharma Ltd | Consumer, Non-cyclical | 4,326 | 57 | 37 | Beat |
| Aug ’21 | Bharti Hexacom Ltd | Communications | 4,258 | 33 | 164 | Beat |
| Apr ’17 | BrainBees Solutions (FirstCry) | Communications | 4,191 | 39 | 150 | Beat |
| Mar ’18 | Hindustan Aeronautics Ltd | Industrial | 4,174 | 42 | 787 | Beat |
| Mar ’17 | Indus Towers Ltd | Communications | 4,090 | 16 | 396 | No |
The performance of these IPOs highlights the risks associated with large IPO investments. While many large IPOs tend to get optimistic valuations during bull markets, only a few have managed to deliver excess returns. Investors need to be cautious about relying solely on the size of an IPO as an indicator of future returns.
Disclaimer: This article is for informational purposes only. It does not constitute financial advice or recommendations, and the views expressed here are not those of the author or the publication. Readers are advised to consult with financial professionals before making any investment decisions.
