Analysis of 2023 IPOs

The primary markets were back in action in 2023, with 59 successful IPO listings. The first quarter of 2023 was muted. Even in the second quarter of the calendar year, we saw close to a dozen IPOs. In the second half of 2023, investors saw 44 IPOs, with most in November and December. It indicates that the momentum will continue, and we will have more upcoming IPOs in 2024. 

The count was good, but how have the IPOs in 2023 performed? In this article, we look at how the IPOs have performed in 2023 - the biggest, the most profitable, and everything else in between.

IPO Market in Recent Years

In 2021, we saw 63 companies coming with their IPOs and raised over Rs 1.19 lakh crore. It was one of the best years for the Indian IPO market. In 2022, the count and volume declined to 40 and Rs 59,301.7 crore, respectively. In 2023, the count increased, but the total money raised was 30% less than the previous year - Rs 41,095.36 crore.

The Biggest IPOs of 2023

As mentioned above, even though the total IPO count in 2023 was on the higher side, the money raised was relatively lower. It was because only five companies raised over Rs 2000 crore in 2023. Mankind Pharma came with the biggest issue size of Rs 4,326.4 crore. Next on the list are Nexus Select Trust and Tata Technologies, with issue sizes of Rs 3200 crore and Rs 3042.50 crore, respectively. JSW Infra came with a Rs 2800 crore IPO in October, and IREDA with a Rs 2150 crore IPO in November.

IPOs with Highest Subscription in 2023

In 2023, several Initial Public Offerings (IPOs) attracted significant interest from investors. Except for Radiant Cash Management Services, all other IPOs were subscribed more than once, and over four IPOs experienced total subscriptions exceeding 100 times.

To understand this phenomenon, it is essential to define the term "total subscription." Total subscription refers to the overall number of shares that investors have applied for during the IPO's subscription period. This metric is crucial as it reflects the demand for the company's shares; a high total subscription indicates strong investor interest, which often signifies a successful IPO. Conversely, a lower total subscription may suggest weaker demand for the shares being offered.

The subscription process typically involves investors submitting their applications within a specified timeframe, and the total subscription figures are finalised once the subscription period concludes. This data serves as a key indicator of market sentiment towards the IPO and can influence the stock's performance once it begins trading on the stock exchanges.

Plaza Wires saw a subscription of 161X, followed by Motisons Jewellers with a subscription of 159.6X. Both companies came with issue sizes of less than Rs 200 crore. Among the larger issues (over Rs 1200 crore), DOMS Industries saw the highest subscription at 93.5X, followed by Tata Technologies and Inox India with 69.4X and 61.3X subscriptions, respectively. The highest QIB subscription happened for Netweb Technologies and Happy Forging, with 228.9X and 220.5X subscriptions, respectively.

IPOs with highest listing gains - 2023

In 2023, out of the total IPOs, only 8 IPOs opened below the issue price. However, the maximum discount to issue size was only 10% for Udayshivakumar Infra Ltd.

Tata Technologies was the multibagger IPO in 2023, with a listing day gain of 162.6%. Next on the lists are companies with nearly 100% gain - ideaForge Technology with a 92.7% listing gain, Utkarsh Small Finance Bank with 92%, and Motisons Jewellers with an 88.3% listing gain. In total 12 IPOs gave more than 50% listing gains.

Only 4 IPOs listed in 2023 are trading in red over the issue price as of 31 December 2023. The biggest gainer is the Indian Renewable Energy Development Agency (IREDA), with over 225% current gains, followed by Cyient DLM, with a 155% gain over the issue price.

Conclusion

The BSE IPO Index was given over 40% returns in 2023, compared to 18% returns delivered by the BSE India, indicating IPO market has done exceptionally well last year.

The market is likely to maintain an optimistic trajectory with over Rs 25,000 crore worth of IPOs in the pipeline. With all the gains companies have seen in recent months, they may be eager to tap the capital market before the general elections. The election year is generally good for the equity market. IPOs like Ola Electric and FirstCry are already in the news and are expected to be some of the biggest upcoming IPOs.