We have Examined all IPOs launched in the last 5 years in India and created a list analyzing Performance of all IPOs launched In India so by studying this list you can get Idea if you should invest in IPOs or not how profitable it can be to invest in IPO

IPO scorecard: Performance of IPOs on listing day and after a year

 

IPO statistics Number of companies In percentage(%)
Total companies with listing gain for the last 5 years 81/121 67%
Companies with listing gain and trading above issue price after 1 year 57/81 70%
Companies with listing gain and trading below issue price after 1 year 24/81 30%
Year Number of IPO’s
2015 21
2016 26
2017 38
2018 24
2019 12
Total 121

If you want to Invest in IPO check out Our article How to apply for IPO? 

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* Share prices are rounded up to the nearest numbers.
* The date given is up to 2/12/2019, So IPO launched past 2/12/2019 are excluded from the list

You can check the list of latest available IPOs on NSE site

Why IPOs are profitable?

 

Public problems provide you with an opportunity for selecting up shares at distinctly low prices. Newly formed groups commonly provide their shares for subscription at par values, whereas existing groups rate their new troubles at degrees which are every now and then as plenty as 20 to 30 consistent with cent lower than the market price of their existing shares.

For example, new problems priced at Rs. 12 to Rs. 15 per share can be quoted as high as Rs. 20 to Rs. 25 consistent with share in the secondary market quickly after their list on the bourses.

Similarly, stocks issued at par by using new groups also quote at high premiums soon when they get indexed at the inventory exchange. For example, in early 2004 public issues of Maruti Udyog, Indraprastha Gas and Divi’s Labs indexed at high premiums.

Equally, most businesses, which went in for IPOs in 2005 and 2006 did well. In most cases, the initial days after listing saw the inventory prices moving well above the listing charges before settling down in a charge range.

Many agencies, which listed at some point of this era gave double digit returns, some companies like Indiabulls, Bharati Shipyard, India Infoline. PTC India Limited, Shoppers Stop, Sun TV Limited, Suzlon Energy and Tulip IT Services even gave triple digit returns.

This is the main motive why public issues are so famous with investors; they offer possibilities for making brief cash which few other styles of investment can hope to fit, healthy specially throughout the market’s bull phase.

The handiest snag lies in getting a firm allotment of stocks. Since most suitable public problems are heavily oversubscribed, masses ought to be drawn and just a few of the applicants succeed in getting a organization allotment. Sometimes the allotment is accomplished on a proportionate basis.

Performance of IPOs  vary based on lots of factorsTherefore, you have to bear in mind your self lucky if you get an allotment of even a small variety of stocks. It is with this background in mind which you need to calculate the pros and cons of applying for IPOs.

 

The Downside of  Investing in IPO


The biggest drawback for the IPO investors was dealing with volatile charge fluctuations alongside the way. It isn’t an exaggeration to mention that there had been many periods, sometimes lasting for extended lengths of time, in the course of which the stocks might fall in a quoted market by using 30% to 50% or more.

Of course, to the true investor, this did not matter as long as the look-through income stored getting bigger and the dividend growth file saved on smashing new records. Sadly, whilst you look at actual investor behavior, a lot of stockholders don’t behave this way. Rather than valuing the enterprise and shopping for accordingly, they look to the market to inform them. They don’t apprehend the distinction between intrinsic price and charge. so some times Performance of IPOs can be down and you may have to face the loss

Conclusion

A number of the IPO’s can be top for making a few quick cash on the day of listing. If you are a serious investor then you definately ought to do simple research before committing your hard earned cash. In few instances, the businesses fundamental are sound however are seeking for better valuation at the time of preliminary Public offer. In such instances, you could enter the stock in secondary marketplace in place of join initial Public offer within the primary market. There may be a probability of getting the higher inventory rate inside the secondary marketplace.

 

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