Of the 37 initial public offerings (IPOs) on the National Stock Exchange (NSE) over the past year, only two companies, Data Patterns India LTD and Adani Wilmar Ltd., gave over 100 per cent return, but nearly 57 per cent of the stocks traded in the red as of September 27, market data collected from National Stock Exchange(NSE) showed.
IPOs are the easiest way to raise capital for a growing company. When people buy company shares, the money is transferred to the company as share capital. The IPO participants become the company’s shareholders.
The company share price is decided through the book-building process. Initially, the book value is disclosed based on the company’s balance sheets, and then an offer price is decided based on bids collected through the IPO window.
Most Tanked Stocks
Policy Bazar (PB Fintech Ltd)
The company planned to raise Rs 3,750 crore although the IPO size was Rs 5,625 crore.
On the opening day, PB Fintech’s share price jumped from Rs 1,150 per share to Rs 1,210. On November 18, 2021, it climbed to an all-time high of Rs 1,440.
But the stock has since tanked 57.6 per cent. Japanese investment bank and one of its shareholders, SoftBank, offloaded Rs 1,900 crore worth of shares in the subsequent period.
PB Fintech’s first quarter (Q1) FY23 profits stood at Rs 505 crore, down 6.4 per cent. Retail investors and others collectively own 82.8 per cent of the company, while mutual funds have 2.5 per cent stake as of June. The company’s current market cap is Rs 21,239 crore.
Paytm (One 97 Communication Ltd)
Foreign firms like Antfin Holdings, Alibaba.com, Softbank, and Elevation Capital have invested in One 97 Communication Ltd., Paytm’s parent company.
Paytm’s IPO size was Rs 18,300 crore. On its opening day on November 18, 2021, its shares were priced Rs 1,560, but it fell by Rs 201 on the same day. The stock tanked 57.3 per cent since its listing.
Its Q1 FY23 profits stood at Rs 1,680 crore, up 9.02 per cent. Retail investors owned 93.4 per cent of the company, while mutual fund houses had 1.14 per cent stake as of June. The company’s market cap is Rs 42,828 crore.
Fino Payments Bank Ltd
Fino Payment Bank’s IPO size was Rs 1,200 crore. The IPO comprised fresh issue of Rs 300 crore worth of shares, and the sale of 15.60 million shares of its promoter Fino Paytech. The stock opened at Rs 544, an all time high for the share, and fell by Rs 1 at close on the same day. On November 18, It fell sharply from Rs 515 to Rs 445. It fell 56.2 per cent since its listing.
The company’s Q1 FY23 profits stood at Rs 289 crore, up 1.4 per cent. Promoters owned 75 per cent of the company, while foreign institutions 9.8 per cent and fund houses 7.3 per cent as of Q1 FY23. The company’s market cap is Rs 1,951 crore.
AGS Transact Technology
Its IPO size was Rs 680 crore. The IPO was aimed at reducing the company’s debt burden, which stood at Rs 1,100 crore in the long term. Promoter Ravi B Goyal sold shares worth Rs 677 crore through an offer for shares. The stock’s opening price in the IPO was Rs 175 but it fell 8.5 per cent on the first day at the close. It fell 53.7 per cent since its listing. The company’s market cap stood at Rs 959 crore. Promoters collectively owned 65.5 per cent of the company, while mutual fund houses and retail investors owned 6.8 per cent and 22.07 per cent, respectively.
Med Plus Health Services
The size of the IPO issue was Rs 1,398 crore, and shares worth Rs 798 crore were offloaded by Lone Furrow investments, PI Opportunities Fund and various other shareholders. The IPO comprised a fresh issue worth Rs 600 crore. The opening price of the share was Rs 1040, and its value increased by 6.4 per cent in one day. It reached its all-time high at Rs 1,290 on January 21. It dropped 39.03 per cent since its listing.
The company’s Q1 FY23 profits stood at Rs 3,779 crore, it noted a 23.1 per cent increase in profits. Promoters owned 40.43 per cent of the company, while fund houses and retail investors owned 12.29 and 44.13 per cent of the company as of Q1 FY23. The company’s market cap is Rs 7,254 crore.