IPO Analysis: Hits and misses of FY2019

With the listing of MSTC Limited, yet another IPO bites the dust on its opening day on account of tepid market sentiments for IPOs. The optimism that took new listings to unrealistic highs in 2017 has still not returned to the market. The markets might have changed courses and marched upward in the month of March, but the same is not the case for IPOs. The most recent IPO of state-run MSTC Limited failed to register listing day gains and fell by 7.5 per cent compared to its issue price of Rs. 120. Many investors look for listing day gains, while long-term investors subscribe to IPOs for capital appreciation.

Although this year was not an extraordinary year for IPOs, there are some sweet surprises. Here is a sneak-peek to how IPOs faired in FY18-19:

Around 12 mainstream companies entered the equity market in the fiscal year 2018-19. Some of them have shown good performance, whereas many IPOs have burnt investors' money. Benchmark indices, Nifty gained 13.83 per cent and Sensex gained around 16.29 per cent this fiscal.

It might be hard to believe but beating the benchmark indices were four IPOs of FY2018-19, namely Fine Organic, TCNS Clothing and RITES. Fine Organic, a speciality chemical company, which listed on the bourses in June 2018 tops the list as the most profitable IPOs of FY2018-19 with gains of close to 50 per cent. On the other hand, the company that performed worst in the equity market after its IPO was Varroc Engineering, losing 44.22 per cent in terms of its listing share price.