How IPOs have performed in last 1 year (Sep-2013 to Aug-2014)?
IPO’s are creating buzz after Wonderla IPO is up by 150% in just a few months and Snowman Logistics IPO subscribed for 60 times. Do you know that if one would have invested in IPO’s in last 1 year from Sep-2013 to Aug-2014, investors would have gained by 43% simple returns on the capital invested. Which IPO’s have performed well and which has screwed investor wealth in the last 1 year? In this article, I would provide some insights about regular + SME IPO’s, how they performed and what was myinvestmentideas.com recommendation for such IPO’s. I would also acknowledge the IPO’s which I recommended, but which went into loss in last 1 year and reasons behind it.
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IPO Investments in India
While I started this blog to share my knowledge, I also share all experiences of where I am making money and where I am loosing. I have slowly been shifted from moderate investor to high risk investor in some segments like IPO’s. IPO’s have been giving good short term listing gains to many of us.
Some of the IPO’s have made 470%+ returns where I have NOT recommended to buy. Investors are investing in companies which have not been doing well or its Financials are not attractive. Their main objective is to get listing gains.
Highlights of IPO performance from Sep-2013 to Aug-2014 (1 year)
- There were 25 companies which came for an IPO from Sep-2013 to Aug-2014 including SME IPO’s (excluding which dropped due to under subscription). These do not include any FPO’s.
- IPO’s have yielded good returns to the investors. The majority of them are trading at a price which is higher than the issue price.
- There are 8 IPO’s which are trading below issue price. Carewell Industries, Tarini International, Dhanuka Commercial, Unishire Urban, Tentiwal Wire, Stellar Capital, Mitcon Const and Amrapali Capital. They are trading at below the issue price (loss of 28% on average).
- Assuming that an investor have invested Rs 50,000 (for SME’s it is higher) in each such IPO in all these 25 IPO’s, investment value would have been Rs 12.50 lakhs and they would have made a profit of Rs 5.41 lakhs in the last 12 months. This indicates 43% simple returns in a 12 month period.
- Though there are several brokerages recommend not to invest in specific IPO’s, investors have been investing in IPO’s to earn profits from listing gains. Though this strategy might be good for listing gains, you cannot hold IPO’s which are not attractive for short to medium term. The classic example is Stellar Capital and Amrapali Capital, which lost 60% of its issue price. Hence, you should be little careful while choosing
- myinvestmentideas.com recommended 7 IPO’s out of the above 25 IPO’s and they made a stellar performance of 40% average simple profits as of date. Wonderla Holidays-150%, Captain Poly-98%, Vishal Fabrics and Oceana Bioteck-20% each are the returns received through these IPO’s. I acknowledge that there is one IPO Mitcon Cons SME IPO where Crisil rated this as 4/5 (above average fundamentals) and I recommended this to investors to buy. However, this made a loss of 17% as of date. Even assuming that investors have invested in all my recommendations, they would have made 40% simple returns in last 1 year through these IPO’s.
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Conclusion: IPO investments in India have been given good returns in the last 3 years. However, one should not forget about IPO investment performance in 2011 where investors had suffered heavy loss by investing in IPO’s. Investing in best IPO’s would always benefit in the long run even in case of negative market sentiments. I keep reviewing all upcoming IPO’s at least 2-3 days before their start date of issue. Keep reading them and invest in best IPO’s to gain good profits in this year of 2014 and 2015.
Readers, Have you invested in any of these IPO’s and made good profits?
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How IPOs have performed in last 1 year (Sep-2013 to Aug-2014)
Thanks for details analysis on IPO.
Do you track two stocks that hit 52 week low today,
2) Jindal steel
Please let me know your idea for investing in these two stocks.
No Dharani. I would come back on this in next couple of day
Good info Suresh..keep growing…..We expect accurate analysis from you henceforth….
Thanks and Regards,
Thanks for the article. You are comparing with issue price. It is only valid if we are allotted. You may probably track the price (high price limit) on listing date. I know it is hard to calculate in that way though … I bought some shares of Wonderla on listing date. But for Snowman, even on day 1, 2 I am not able to buy. I was able to buy some shares only on yesterday.
Few questions about current IPOs:
Are you still holding Wonderla or sold it? How long you are planning to hold? Recommendations please.
Have you bought Snowman? How long you are planning to hold? Recommendations please.
There are different opinions about Shemaro. Are you confident, shall we go ahead and invest? Recommendations please.
Finally, it would be great, if you can write an article on current IPOs: with recommendations like how long you would keep the shares, sell some of the shares, buy some of the shares, etc. and keep updating it once in 15 or 30 days.
Sri, The analysis is about if one invested in IPO’s, how they would have gained. My analysis is not about what happens if you buy on day-1 of listing. In such case, it could be up or down. Regd your last point, sure would do that.
Applied wonderla but not allocated. Now waiting for Shards Cropchem and Shemaroo for allocation. 🙂
Yesterday I saw mixed reactions for Shemaroo IPO..
Suresh.. How Shemaroo will perform? Wee will it reach the goal acquiring 120 crore ?
What are your thoughts ?
Today it has subscribed to 7.5 times. Don’t worry. Somewhere we need to take risk right ?
Suresh Ji, thanks for the useful information.
Suresh Ji if you are tracking Aadhaar Ventures India share , please share your opinion on that stock. First time I did a mistake in hurry, i am stuck with 60K shares at @.75 paise but currently this share is in very bad running, I can stay invested in this scrip for another 2 to 3 years if there is any positive growth. Please suggest.
I am not tracking this share. Need some time to do this
Thank you Suresh-ji.