85% of stocks listed in February now below IPO price
What's the story
The Indian Initial Public Offering (IPO) market, a hotbed for investors in the past few years, has recently taken a hit.
The change comes largely due to the continuing sell-off in the equity market. As a result, February saw a marked decline in bidding activity.
Moreover, approximately 85% of stocks listed during this period are now trading below their issue prices.
This development signals a challenging phase for newly listed companies and investors alike.
Market analysis
February sees lukewarm response to IPOs
In February, 21 companies successfully raised funds from Dalal Street investors, according to data from Trendlyne.
Most of these issues belonged to the Small and Medium Enterprises (SME) category, making up 80% of the total. The rest 20% belonged to the mainboard segment.
Together, these firms raised ₹14,750 crore last month with Hexaware Technologies leading with an issue size of ₹8,750 crore.
Market performance
Majority of stocks trading below issue prices
A review of the current trading prices of all 21 stocks reveals that 18 (85%) are now trading below their issue prices.
The top laggard is Readymix Construction with a drop of 52%, followed by Ken Enterprises and Malpani Pipes And Fittings, which are currently down by 49% and 33%, respectively from their IPO prices.
In 2025 so far, 39 of 51 IPOs are trading below their issue prices, with GB Logistics Commerce seeing the steepest decline, down 60%.
Subscription trends
Subscription rates fall in February
The data shows a stark decline in subscription rates for both SME and mainboard categories.
15 out of 17 SME issues witnessed a subscription rate of less than 50 times, which is much lower than January's numbers.
In the retail segment, 10 issues had a subscription rate of less than 10 times, with only two managing to get over 100 times subscriptions.
Listing delays
Weak market sentiment impacts companies planning to list
The weak market sentiment is not just affecting investor behavior but also influencing companies looking to list their shares on exchanges in 2025.
Reports indicate that the prolonged weakness in the secondary market is prompting firms to push back their listing process on Dalal Street.
Some are even scaling down their issue size and valuations to match the current market sentiment.