10 stocks listed in 2024 trade below their issue prices; will they suffer more? Here’s what experts say

  • Mainboard IPO stocks like Capital Small Finance Bank, Popular Vehicles and Services, EPack Durables, GPT Healthcare trading below issue price. Hold existing positions for strong business models. IPO market expects more launches with BSE market cap hitting $5 trillion.

Dhanya Nagasundaram
First Published31 May 2024, 05:00 PM IST
Indian IPO market has seen 31 mainboard IPOs in May 2024. SME IPO segment is buzzing with around 100 listings. Rise attributed to strong economic development, exceeding company earnings expectations, and new-age companies lining up for public debuts. Photo: iStock
Indian IPO market has seen 31 mainboard IPOs in May 2024. SME IPO segment is buzzing with around 100 listings. Rise attributed to strong economic development, exceeding company earnings expectations, and new-age companies lining up for public debuts. Photo: iStock(iStock)

Throughout 2024 so far, the initial public offering (IPO) market has maintained its growth and performed admirably all around. There have been 30 IPOs in the mainboard space thus far in May, taking into account that this is an event-driven year with elections and other macro event triggers. Only eight IPOs were launched last year in 2023 up to May.

The small and medium-sized enterprise (SME)IPO segment has been experiencing unprecedented buzz. There have been around 100 SME IPOs listed as of May 2024.

Also Read: IPO Boom: 57% of SME issues saw over 100% subscription in 2024, HOAC Foods leads pack; check top performers

Analysts believe that the rise in IPO activity has been driven by the strong economic development, rising Indian stocks, and consistently exceeding expectations of company earnings, which encourages more companies to go public. The IPO market has benefited greatly as a consequence, and new –age companies like Tata Capital, Hexaware, Ola Electric, and Swiggy are lining up for their 2024–2025 public market debuts.

“The primary market witnessed 30 mainboard IPOs till May this year. These 30 companies raised around 30,000 crore. In 2024, Bharti Hexacom ( 4275 Cr), Aadhar Housing Finance ( 3000 Cr) and Go Digit General Insurance ( 2615 Cr) were among the large-sized IPOs so far during the first half of 2024. Amidst general elections, the primary market continues to remain vibrant, with a solid response to certain IPOs,” added Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Pvt Ltd.

Also Read: Kronox Lab Sciences IPO: From financials to key risks, here are 10 key things to know from RHP before subscribing

10 mainboard IPO stocks trading below their issue price

Of the 30 mainboard initial public offerings (IPOs) that made their debut in 2024, ten—Capital Small Finance Bank Ltd, Popular Vehicles and Services Ltd, EPack Durables Ltd, GPT Healthcare Ltd, Gopal Snacks Ltd, Entero Healthcare Solutions Ltd, SRM Contractors Ltd, R K Swamy Ltd, J G Chemicals Ltd, and Rashi Peripherals Ltd—have been trading below their issue price or IPO price.

According to Dr. Ravi Singh, SVP, Retail Research, Religare Broking Ltd, despite market corrections driven by global economic uncertainty and election-related volatility, the fundamentals of these companies remain strong. Investors are advised to hold existing positions, given the solid business models and growth potential. For new entries, waiting for post-election stability is recommended to capitalise on future growth opportunities.

Company NameListing DateIssue SizeIssue PriceTotal SubscriptionListing Close (Rs)LTP (Rs)Current Gain (%)
Capital Small Finance Bank Ltd.14 Feb `24523.1 Cr
468
4.0x435.0329.5-29.6%
EPack Durables Ltd.
30 Jan `24
640.0 Cr 23016.4x
207.6
171.9-25.3%
Popular Vehicles and Services Ltd.19 Mar `24601.5 Cr 2951.2x276.1221.9-24.8%
GPT Healthcare Ltd.
29 Feb `24
525.1 Cr
186
8.5x
200.7
143.9
-22.6%
Gopal Snacks Ltd.
14 Mar `24
650.0 Cr
401
9.0x
362.7
316.5-21.1%
Entero Healthcare Solutions Ltd.16 Feb `241,600.0 Cr
1258
1.5x1,149.51,028.3-18.3%
SRM Contractors Ltd.
03 Apr `24
1,30.2 Cr
210
86.6x226.0175.3-16.5%
R K Swamy Ltd.
12 Mar `24
423.6 Cr
288
25.9x262.6275.6-4.3%
J G Chemicals Ltd.
13 Mar `24
251.2 Cr
221
27.8x184.8215.4-2.5%
Rashi Peripherals Ltd.
14 Feb `24
600.0 Cr
31159.7x
321.5
305.6-1.7%
Source: trendlyne       

As compared to its IPO price of 468, Capital Small Finance Bank share price has fallen by 30%. Listed at 435 at the closing price, the Capital Small Finance Bank IPO had a lackluster launch on the exchanges in February. Capital Small Finance Bank IPO was subscribed 4 times on the last day of bidding.

Similarly, since its debut, shares of Gopal Snacks, Popular Vehicles and Services, GPT Healthcare, and EPack Durables have all plummeted by more than 20%.

Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities highlighted that among the recently listed IPOs, R K Swamy can be a good pick for a long term investor considering a pure play-on business model which has a single window marketing solution for creative media data analytics and market research services. R K Swamy has over 50 years of track record in integrated marketing and allied services.

Also Read: Biggest IPOs on US exchanges this year come from non-US firms. Check details here…

IPO market - Road Ahead

According to Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Pvt Ltd, looking ahead, the market is set to welcome several more IPOs, with expectations running high for their success.

The market cap of BSE-listed companies recently hit a historic milestone, exceeding $5 trillion for the first time. This achievement can be attributed to various key factors. A strong rally in core sectors has played a significant role, driven by substantial growth and strong investor interest. Additionally, positive economic indicators and a favourable long-term outlook have further strengthened the market sentiment. Trends in foreign investment and strong investor confidence have also contributed to this unprecedented market cap, reflecting the overall robustness and resilience of the Indian economy.

Also Read: Hero FinCorp IPO: Hero MotoCorp arm to raise 4,000 crore via IPO

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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First Published:31 May 2024, 05:00 PM IST
HomeMarketsIPO10 stocks listed in 2024 trade below their issue prices; will they suffer more? Here’s what experts say

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