Multibagger IPOs: 15 debutants that delivered up to 300% return in 2021

NEW DELHI: In a year marked by many big-ticket IPOs like Paytm, Nykaa and Zomato, Hindi language idiom 'chota packet bada dhamaka' played out in the primary market. Among 63 companies that listed on exchanges so far in 2021, 15 have offered multibagger returns of up to 300 per cent to investors.

Interestingly, 11 of these were small-sized IPOs of Rs 100-600 crore.

The Rs 100 crore IPO by Nureca rewarded investors the most, with a return of up to 323 per cent over the issue price of Rs 400. The company's share sale offer was subscribed 40 times and it had listed at a premium of 59 per cent.


The Rs 170 crore issue of Paras Defence is a close second with a return of 321 per cent. Shares of MTAR Tech followed suit, up 295 per cent over the IPO price of Rs 575. The Rs 596 crore issue was subscribed 200 times, and analysts are still bullish on its prospects, projecting up to 40 per cent upside from current levels. Other small-size IPOs - Laxmi Organics, (up 205 per cent) Easy Trips Planners and Latent View are among the top five debutants that have nearly quadrupled investors' wealth.

"The low retail float is helping these companies sustain prices. In bigger issues, even if in percentage terms, the share float is small, in absolute terms it is still big. And when valuation comfort is not there, big issues are not able to sustain in the market," said G Chokkalingam, Founder & MD, Equinomics Research & Advisory.

The demand for big-ticket IPOs has helped the primary market raise a record Rs 1.18 lakh crore in the calendar year even as some of them have left investors' portfolios bleeding.

Paytm parent One97 Communications is a prime example as it trades at a discount of 37 per cent to IPO price amid valuation concerns surrounding the counter. In a recent blog post, Aswath Damodaran, Professor of Finance at the Stern School of Business at New York University, and popularly known as the 'Dean of Valuation', suggested that founder Vijay Shekhar Sharma should talk less and focus more on Paytm’s path to profitability. CarTrade Tech (Rs 3,000 crore IPO), Fino Payments Bank (Rs 1,200 crore IPO) and Krssna Diagnostics (Rs 1,213 crore IPO) have also eroded investor wealth.

That said, Sona BLW, Macrotech Developers and Clean Science made it to the list of multibagger debutants of 2021, offering investors between 171-139 per cent returns.

Outlook
The IPO pipeline for 2022 continues to remain strong, with the behemoth IPO of LIC likely to open in the first quarter of 2022. That apart, Oyo, Adani Wilmar, Go Airline, Emcure Pharma, Gemini Edibles, India1 Payments, Pradeep Phosphates, Arohan Financial Services and Northern Arc Capital are some of the companies which have already received Sebi approval for public issues.

"Strong domestic and global demand is expected to continue to contribute to positive IPO activity. However, there could be headwinds resulting from the lingering pandemic in Europe, together with impact from higher inflation and interest rates in the near to medium term," EY said in its 2021 global IPO trends report.