India’s IPO Surge: Record-Breaking Listings and Exceptional Market Gains
India took the lead in Initial Public Offerings across the globe by reaching a record high of 178 companies going to market in 2024. Momentum that places India on the first rung in terms of listings above 5,450, way ahead of other countries. It’s listing gains to the strong end.
This trend of good IPO performance since 2020 continues. Mainboard IPOs of the year 2024 have given approximately 30% average return, an outperformer in relation to the general market. The BSE IPO Index has performed better compared with the BSE 500, illustrating the attraction towards newly listed companies.
Unparalleled Return in SME IPOs
SME IPOs have seen tremendous listing gains mainly due to strong domestic demand and confident investor sentiment. Most of the SME’s IPOs have turned out to be multi-bagger returns, with many returning upwards of 50%.
Top 5 Performing IPOs of 2024
1. Jyoti CNC Automation Ltd or JCAL
Jyoti CNC Automation Ltd (JCAL) is a leading manufacturer of metal-cutting CNCs like 5-axis CNCs, CNC Turning Centres, and Vertical and Horizontal Machining Centres. It caters to the aerospace, automotive, and defence sectors. Being the third largest CNC maker in India, Jyoti CNC holds a 10% market share in the country. On an international scale, it stands at 12 and targets high-precision markets.
Financial Analysis
The revenues for the June 2024 quarter of Jyoti CNC have seen an increase to 73.8 cents YoY, reaching the amount of Rs 3.6 billion, its net profit saw growth of 475% to Rs 509.2 million; its post-IPO stock price rose by 253% as a result in order to reflect good health and demand.
IPO Details
Listing Price: Rs 433. IPO Opened on 16 Jan 2024 at Rs 331. Its price now stands at Rs 1,169. Good financials and expansion prospects have garnered ample investment interest.
IPO Purpose
The money raised through the issue of this IPO will be used for expansion, R&D in the CNC technology, and also for the reduction of debt that will allow Jyoti CNC to bolster its position in heavy-demand sectors like space and defence.
2. Bharti Hexacom
Bharti Hexacom, a wholly owned subsidiary of Bharti Airtel holds 70% stake agreements for wireless, fixed-line and broadband services in the state of Rajasthan and selected Northeast India circuits. Bharti Hexacom has been able to sustain a strong infrastructure network in place with an installed 23,748 towers including 5,005 owned, to serve its operations within low teledensity zones and high-growth-potential circuit areas.
Financial Condition
Bharti Hexacom was launched at Rs 813.7 from Rs 570 on 12 April 2024 and currently, the stock price has surged 154% to Rs 1,448. Subscriber additions and ARPU expansion in the underserved areas are driving revenue growth.
IPO Details
Bharti Hexacom’s IPO was floated at Rs 570 per share, which opened at Rs 813.7. It attracted investors because it focused on high-growth regions and its pure-play wireless model that accounts for 98% of its revenue – a factor that separates it from larger telecom competitors.
IPO purpose
The IPO proceeds are to be used for initiatives like customer transition from 2G to 4G/5G, higher-value data packs and post-paid conversions. It would focus on ARPU growth and operational efficiency improvement to make Bharti Hexacom more competitive in emerging markets.
3. Premier Energies
Premier Energies has been a large manufacturer of solar cells and modules since 1995 with GEF Capital as a backer. It was popular for its pioneering photovoltaic solutions, which it served the likes of NTPC, Tata Power Solar, and Panasonic. It is a leading player in India’s solar energy scenario because of its expertise and innovations.
Financial Position
As of September 3, 2024, since listing, shares of the company have witnessed a high rise of 146 per cent from Rs 450 to Rs 1,109. When it was issued, the issue price was Rs 839 along with a premium of 86 per cent. After tremendous demand for the issue, it bagged over bids of Rs 1.48 trillion; on the contrary, it successfully acquired its order book from Rs 61 billion into the solar water pumping order amounting to Rs 2.2 billion.
IPO Details:
Premier Energies’ IPO at Rs 450 opened at Rs 839 with an 86% premium and rallied from there to 146%. There was a significant investor interest in Premier Energies’ IPO, with a robust order book and high-profile client relationships, which have positioned it at the leader’s position in India’s renewable energy sector. Purpose of the Issue.
IPO Purpose:
Backed through the IPO, they’ll do forward and backward integration by giving them higher margins in its products. Also, its huge orders from government units and the private sector. Another win recently, wherein this company has been allocated projects for solar water pumping schemes under the Pradhan Mantri Kisan Urja Suraksha, gives a view of how is it scaling sustainable solutions for energy across India.
4. Bajaj Housing Finance Company Ltd
Bajaj Housing Finance Company Ltd is one of the key Indian housing finance companies with the strong support it gets from the Bajaj group. It enjoys rapid growth in this business model with varied mortgage-lending products. Since its launch in 2017, it has emerged as one of the leading non-deposit-taking HFCs, with one of the highest AUMs.
Financial Position
Bajaj Housing Finance debuted on 16 September 2024. From the issue price of Rs 70, the stock soared 130% from Rs 70 to the Rs 150 opening level. It quoted at a premium of 114% of its issue price. Bajaj Housing Finance enjoys excellent loan quality. That is highlighted by an NPA ratio of 0.3% in terms of GNPA and 0.1% for NNPA. AUM at the end of FY24 stood at Rs 913.7 billion. That puts it second among the HFCs of India.
IPO Details
Bajaj Housing Finance’s IPO, the largest of 2024 was oversubscribed 67 times. Listed at Rs 150 the stock rose 130% since its Rs 70 issue price, reflecting strong demand and brand strength in the Indian housing finance market.
IPO Purpose:
The IPO proceeds are expected to be used for an expansion across the country; the focus will be, however, on tier II and tier III cities. Bajaj Housing Finance will look to enhance the technology platform, with digital channels, and online loan processing through AI, to streamline processes and improve customer experience.
5. Exicom Tele-Systems
Exicom Tele-Systems operates in power systems and solutions for electric vehicles by enabling telecom sites as well as public charging networks. Products include DC power systems as well as Li-ion energy storage for backup power as well as EV charging from the range of 3.3 kW up to 360 kW that is installed for both residences and enterprises.
Financial Position
Since listing on 5 March 2024, the stock of Exicom has increased by 130% of its issue price of Rs 142 and closed at Rs 327. Its revenue for FY24 improved by 44% from Rs 7.01 billion to Rs 10.2 billion and profit to Rs 660 million with a growth from Rs 80 million. Gross margin improved by 2% with decreased finance costs.
IPO Details
The IPO of Exicom Tele-Systems was launched at Rs 142 and rose to 130% above the launch price to the present at Rs 327. This valuation reflects the company’s successful performance in EV charging and power systems based on increasing demand for sustainable infrastructure.
IPO Purpose:
IPO proceeds will be utilized for R&D of the next-generation chargers and power equipment, and for building an integrated manufacturing complex in Hyderabad. The aim is to add more products to their portfolio and strengthen the company’s pan-India service network.
Good Performers Other than Top 5:
1. Platinum Industries
PVC Stabilizer and Specialty Chemical giant, Platinum Industries Limited, is seen listing in the market after a price of Rs171 at which it had commanded an initial public offering or IPO of 33.33%. The stock today listed in the market in the early hours at around Rs 228 on the BSE and Rs225 on the NSE and finished the session at Rs 220.90. Huge demand from the IPO and it oversubscribed 98.71 times.
2. Unicommerce eSolutions
Unicommerce eSolutions is an omnichannel retail solution firm that enhances the operational efficiency of businesses. The issue price was ₹108 per share and opened for subscription on August 6, 2024. As strong anchor demand fueled its rise, shares soared by 15% after listing, which indicates the bullish sentiments of investors and intense interest in the market in e-commerce solutions.
These firms also exhibit the different sectors that are thriving in the present economy.
Reasons behind Success in IPO
There are some reasons behind the success of such IPOs:
Role of the CFO: The CFO is crucial in bringing out the elements of the IPO, and balancing the business and stock market perspectives. High-level understanding by the CFO is sure to make for effective marketing and the right selection of investment bankers.
Selection of Investment Banker: The selection of a good investment banker is critical. They should be able to tell a compelling story to the investors and manage roadshows and compliance efficiently using their expertise to attract institutional investors.
Strong Manpower and Capital Base: Companies have to look financially healthy, thereby depicting top talent and capital accessibility. This is what keeps investors and investment bankers abreast of the same.
Assessment of Investor Appetite: A public investor and analysts 6-12 months before will help assess their demand, fine-tune the company’s narrative, and give a solid reputation in the market.
Transparency and Disclosure: The level of transparency that companies establish calls for a market premium. Companies should avoid the usage of obscure metrics while keeping the financial projections free of ambiguity and manage their expectations realistically.
Effective Pricing Strategy: Right pricing is always important. The high price on opening day reflects a missed revenue opportunity. Serious long-term investors are the key to sustainability.
Post-IPO Investor Relations: Investor relations become the most vital after the IPO. The CEO and CFO should spend 20-30% of their time talking to investors since the ability to sustain short-run performance can be crucial for the long-run momentum of the stock.
Conclusion
The IPO landscape in India is witnessing a great spurt during 2024 as more than 178 companies enter the market successfully. It is reflective of the status of India as one of the leading countries across the globe for IPOs. We witnessed an impressive debut day with remarkable gains in most of the sectors. Jyoti CNC Automation and Bharti Hexacom are among some of the companies where performance has been driven by both financial performance and confidence emanating from investors and also good positioning.
The main factors driving the success of those IPOs are the roles played by CFOs coordinating such strategies, chosen investment banks, and sound capital, which gives investors high confidence levels. Transparency of pricing with prudent pricing decisions and keeping the investor interactive with current information also builds continued interest and stability in the marketplace.
