Shining Bright: THESE 12 IPOs have maintained higher premiums on their listings since last Diwali

Post Diwali 2023, around a dozen initial public offerings (IPOs) have consistently received higher premiums on their listing gains, with each exchange surpassing 100%. This group is headed by the Indian Renewable Energy Development Agency Ltd (IREDA), followed by Motisons Jewelers Ltd and DOMS Industries Ltd, among others.

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

Arun Kejriwal, the founder of Kejriwal Research and Investment Services, highlighted that while these stocks are currently valued higher than their original quotation, it is also crucial to assess them against their 52-week high and low levels. Since last Diwali, we have witnessed impressive performance, yet many stocks are still nowhere near their 52-week highs as they have all undergone corrections.

IREDA, currently priced at 210, has lost a significant portion 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 52-week low. Much of the initial listing gains have declined; however, the absolute figure remains doubled, just like the share that peaked ₹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 take a look at the performance of some of the best in detail.

India’s IPO market since the last Samvat

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

The EY India report shows that there was excellent growth in both the main and SME markets in the third quarter of 2024. The flagship market saw 27 IPOs, an increase of 29% from the 21 IPOs in the third quarter of 2023, while generating $4,285 million – an impressive 142% increase from $1,770 million in the same period last year. The SME sector continued its robust performance with 84 IPOs, raising $398 million.

A supportive macroeconomic environment has created positive conditions for IPO activity, with interest rates expected to fall to 6.2% in 2025 and inflation expected to fall to 4.5%. The strong secondary market performance for mid- and small-cap stocks has motivated more privately held companies to consider an IPO, as evidenced by 68 companies withdrawing their Draft Red Herring Prospectus (DRHPs) in the third quarter of 2024, according to SEBI data.

“With 66 companies filing for stock exchanges and strong interest from both domestic and multinational companies, India’s IPO momentum is expected to continue in 2024 and 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 the stock was trading flat but bounced back this week with gains of more than 9%. This revival is seen from a critical support of 200sma. While the undertone is still not very encouraging, one can expect this rebound to extend towards 230 in the short term, with 200 continuing to act as support.

Motisons jewellers

Kapil Shah, Technical Analyst at Emkay Global and Technical Analysis Trainer at Finlearn Academy explained that the stock has shown 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 move above 325 would mark a bullish breakout.

DOMS Industries

Over the past ten months, DOMS Industries has not shown any bearish candles on the monthly chart, indicating a prevailing bullish trend. The stock is showing robust support at the 2,470 level. Subsequent corrections could provide favorable buying opportunities. Moreover, a breakout above the 2900 level would further strengthen the bullish outlook, Kapil Shah added.

Disclaimer: The above views and recommendations are those of individual analysts, experts and brokerage firms, not Mint. We advise investors to contact certified experts before making an investment decision.