Shining Bright: THESE 12 IPOs maintain higher premiums from their listing since last Diwali

Following Diwali 2023, around 12 initial public offerings (IPOs) have consistently held higher premiums from their listing gains, with each one surpassing 100%. Leading this group is the Indian Renewable Energy Development Agency Ltd (IREDA), followed by Motisons Jewellers Ltd, DOMS Industries Ltd, among others.

After Diwali 2023, there have been approximately 90 IPOs on the mainboard, with around 65 having listed at a premium, while the remaining 25 debuted at a discount. Of the IPOs that listed with premiums, 15 have become multibaggers, significantly benefiting their investors. Mohit Gulati, the CIO and managing partner of ITI Growth Opportunities Fund, highlighted that growing investor enthusiasm is evident, with many IPOs oversubscribed and some achieving multi-bagger returns on their debut. This has boosted the market capitalization of listed companies in India to about $4 trillion, surpassing Hong Kong.

Arun Kejriwal, the founder of Kejriwal Research and Investment Services, emphasized that while these stocks are currently valued higher than their initial listing, it's also crucial to assess them relative to their 52-week high and low levels. Since last Diwali, we've observed impressive performances, yet many stocks are not close to their 52-week highs, as they have all seen corrections.

IREDA, currently priced at 210, has lost a significant amount of its previous gains. A notable example is Tata Technology, which reached a peak of ₹1,400 but is now valued at ₹1,006 compared to that high, with a low of ₹970. Therefore, the stock is currently ₹36 or 4% above its 52-week low. Much of the initial listing gains have diminished; however, the absolute figure remains doubled, as the share that peaked at ₹1,400, which was 2.8 times its original value, is now trading at 2 times and is only slightly above its low.

Let's examine in detail the performance of some of the top ones.

India's IPO market since last Samvat

According to Mohit Gulati, India's IPO market has had a remarkable year in 2024, with over 260 companies raising more than $9 billion, more than double the amount from the same period last year. This surge has established India as a global IPO leader.

The report from EY India indicates that the third quarter of 2024 saw outstanding growth in both the main and SME markets. The main market achieved 27 IPOs, marking a 29% rise from the 21 IPOs in Q3 2023, while generating US$ 4,285 million—an impressive 142% increase from US$ 1,770 million during the same period last year. The SME sector continued its robust performance with 84 IPOs, which raised US$ 398 million.

A supportive macroeconomic environment has fostered positive conditions for IPO activity, with interest rates anticipated to decrease to 6.2% by 2025 and inflation expected to go down to 4.5%. The strong performance in the secondary market for mid- and small-cap stocks has motivated more unlisted companies to consider going public, as evidenced by 68 companies submitting their Draft Red Herring Prospectus (DRHPs) in Q3 2024, according to SEBI data.

“With 66 companies having filed for listings and strong interest from both domestic and multinational firms, India's IPO momentum is expected to continue throughout 2024 & 2025. The moral of the story is simple- If there is value left on the table; investors will reward with their interest and subscription numbers,” said Gulati.

Technical Views

IREDA

Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, said that the stock was trading flat,however it has bounced this week with gains more than 9%. This bounce is seen from a critical support of 200sma. While the undertone still is not much encouraging , one can expect this bounce to extend towards 230 in near term with 200 continue to act as support.

Motisons Jewellers

Kapil Shah, Technical Analyst, Emkay Global, and Technical Analysis Trainer at Finlearn Academy explained that the stock has exhibited a consistent upward trajectory since its initial listing. Over the past 30 trading sessions, it has fluctuated within a range of 265 to 325. The prevailing trend appears to be sideways to positive. Potential support levels are identified at 265 and 245. A movement above 325 would signify a bullish breakout.

DOMS Industries

Over the past ten months, DOMS Industries has not exhibited any bearish candles on the monthly chart, which indicates a prevailing bullish trend. The stock demonstrates robust support at the 2,470 level. Subsequent corrections may present favorable buying opportunities. Additionally, a breakout above the 2900 level would further reinforce the bullish outlook, added Kapil Shah.

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 decision.