Kalyan Jewellers and Suryoday Small Finance Bank ended sharply below the IPO price during their trading debut on Friday. Shares of four companies that have listed this week are now been below issue price, providing a reality check to the IPO frenzy seen this month.
Suryoday’s stock opened with a 4 per cent discount to its issue price and ended the session at Rs 276, a discount of 9 per cent as compared to the issue price of Rs 305. Meanwhile, Kalyan Jewellers got listed at Rs 74, at a 14 per cent discount to its issue price and ended the session at Rs 75, a discount of 13.4 per cent to the issue price.
The IPOs of Suryoday Small Finance Bank and Kalyan Jewellers were subscribed two times each.
On Wednesday, shares of Anupam Rasayan India, a speciality chemicals firm, were listed at a discount to its issue price. And last week, shares of Easy Trip Planners, too, delivered muted gains. Anupam Rasayn and Easy Trip Planners got subscribed 44 and 160 times, respectively.
These four companies’ tepid debuts suggest that euphoria around listing gains has fizzled out amidst volatility in the markets. Rising coronavirus cases and bond yields had rattled investors in the last few weeks.
Moreover, companies that got listed over the past six months have seen their stock prices come off an average of 20 per cent from their peak. Most of these companies had given good listing gains.
Market players said high net-worth individuals (HNIs) had lost money back-to-back in Anupam Rasayan and Easy Trip’s listings. And that was reflected in the less than enthusiastic participation in Suryoday Small Finance and Kalyan Jewellers IPOs. The HNI portion of Suryoday Small Finance Bank and Kalyan got subscribed 1.3 times and 1.9 times, respectively. In contrast, the HNI portion of the Anupam Rasayan was subscribed 97 times. Essentially, wealthy investors placed leveraged bets on applying in the IPO. This pushed up their acquisition cost.
HNIs and retail investors take cues from the grey market to apply in IPOs. The so-called grey market premium for both Anupam Rasayan and Easy Trip had suggested stellar listing gains. However, the actual listings failed to live up to expectations amid volatility in the secondary market.