After initial euphoria in the markets, late last year and early 2022, the primary markets seem to have lost their fervor to the sluggish listing of LIC and others, as also lingering recessionary fears weighed on investor sentiments.
Very few initial public offerings (IPO) were carried out between April and May, this year. As many as 17 companies have raised more than Rs 45,000 crore through IPOs and follow-on public offers (FPO). However, grim market conditions have led most of these IPOs/FPOs to prove unprofitable for investors.
The equity market has fallen drastically amid weak global sentiment. The frontline index Nifty50 has plunged more than 11% so far in 2022.
The interest rate hike scenario, rising inflation, brutal selling by foreign institutional investors (FII), falling rupee and other factors have added to selling pressure in the broader markets.
Out of the 17 companies listed in 2022 so far, shares of 9 companies are trading deep below their IPO price, eroding a significant wealth of investors. Check out the top five wealth destroyer IPOs of 2022 so far:
| Company | Issue Price (Rs) | Current Market Price (Rs) | Return (%) |
| AGS Transact Technologies | 175 | 68.75 | -60.7 |
| Life Insurance Corporation of India (LIC) | 949 | 664.70 | -30 |
| Uma Exports | 68 | 51.05 | -25 |
| Prudent Corporate Advisory Services | 630 | 482.00 | -22.6 |
| Rainbow Children’s Medicare | 542 | 419.55 | -21.3 |
| Ethos Ltd | 878 | 765.85 | -12.7 |
| Paradeep Phosphates | 42 | 39.15 | -6.7 |
| Delhivery | 487 | 463.00 | -4.9 |
| eMudhra | 256 | 250.90 | -2 |
(Current market price as of June 20 closing)
AGS Transact Technologies
Listed on January 31, 2022, shares of AGS Transact Technologies have plunged 60% from its IPO price of Rs 175. The stock fell 7.83% on its listing day.
The IPO of AGS Transact Technologies, a leading omnichannel payment solution provider, was opened for public subscription between January 19 and 21. The company raised Rs 680 crore from the initial share sale at a price band of Rs Rs 166 to Rs 175 per share.
The stock is trading near its all-time low of Rs 72.10 apiece on the National Stock exchange (NSE). The market capitalization of the company has come down to near Rs 872 crore.
Life Insurance Corporation of India (LIC)
The IPO of Life Insurance Corporation of India (LIC), the largest ever in Indian markets, also has the tag of one of the biggest wealth destroyer IPOs. Market conditions just started getting grimmer when LIC got listed and despite its strong business portfolio, leadership position and high growth prospects, LIC shares have fallen over 30% from its listing price, wiping out more than Rs 1.8 lakh crore of investors’ wealth.
LIC shares made a weak debut on exchanges at an 8.6% discount to the issue price on May 17, 2022. The Rs 21,000-crore worth IPO of LIC was subscribed nearly 3 times led by robust demand from its policyholders and employees.
At the current price, the market capitalisation of LIC stands at around Rs 4,16,375 crore on the NSE, making it the seventh most valued company in India. However, LIC shares are trading near their lifetime low level of Rs 650 apiece.
Uma Exports
The shares of Uma Exports, the distributor of the agricultural products, are down around 25% from the IPO price. Uma Exports made a strong listing on April 7 at Rs 75 per share against the issue price of Rs 68. The stock rallied going ahead and hit a high of Rs 92.25 apiece on April 12.
However, the shares of Uma Exports lost their sheen and hit an all-time low of Rs 47 on May 6 amid the prevailing market rout. The market cap has fallen to around Rs 173 crore.
The Rs 60 crore worth IPO of Uma Exports remained open from March 28 to March 30 and the shares were sold at a price of Rs 65 to 68 apiece in the IPO.
Prudent Corporate Advisory Services
The shares of Prudent Corporate Advisory Services, a retail wealth management services provider, have declined 22% since its listing. The stock made a debut at over a 3% premium to the issue price of Rs 630 apiece on May 20. However, the stock fell more than 10% at the close of the first trading day.
On June 17, Prudent Corporate Advisory Services shares hit a low of Rs 460.95. At the current stock price, the company’s market cap is around Rs 2,040 crore.
The 538.61-crore worth IPO of Prudent Corporate Advisory Services opened on May 10 and closed on May 12, at a price band of Rs 595 to Rs 630 per share.
Rainbow Children’s Medicare
Rainbow Children’s Medicare IPO has been one of the top wealth destroyers in 2022 so far as the shares of the company are down 21% from its issue price. The stock currently is trading near Rs 421 apiece on the NSE as compared to the IPO price of Rs 542.
Rainbow Children’s Medicare got listed on May 10 and the stock fell nearly 17% on the first trading day itself. The stock hit a lifetime low of Rs 410 on May 17.
The IPO of Rainbow Children’s Medicare, the operator of a multi-specialty pediatric, gynaecology and obstetrics hospital chain in India, was open during April 27 – 29. The company raised Rs 1,580.85 crore from the IPO.
The equity markets had a bumpy road so far and the investor confidence seems to have shattered with the weak IPO of LIC and others. The domestic primary market may remain muted going ahead amid the nervousness among investors and weak sentiment in the secondary markets.
