The allure of public offers seems to be returning on Dalal Street following a lull. Paras Defence & Technologies has surpassed 39 other companies to emerge the best debutant so far this year. Its listing day performance outshone that of many others by a huge margin.
Paras Defence began its journey in the in the secondary market at a premium of 171 percent. That meant one lot of shares won in the IPO at Rs 14,875 became worth Rs 40,375 on the listing day itself.
The Mumbai-based defence engineering company beat top debutants of the recent past, including GR Infra, Clean Science, Tatva Chintan, MTAR Tech and Nazara Tech, which doubled or nearly doubled investor's money on a listing day.
Paras Defence now tops the list of top market debutants:
|Company||Issue Price||Listing price (BSE)||Premium at debut (%)||IPO Subscription|
|G R Infraprojects||837||1,700||103||103|
|Clean Science and Technology||900||1,784.4||98||93|
|Tatva Chintan Pharma Chem||1,083||2,111.8||95||180|
Does the robust demand for Paras Defence & Space signal the return of strong investor interest in the IPO market ahead?
Ajit Mishra, VP-Research at Religare Broking, is among the optimists, expecting the traction in the IPO market to make a comeback.
"We have been seeing sustained interest in the primary market though some of the recent listings did disappoint the participants especially those who had invested only for listing gains. We recommend being selective now and preferring businesses that are fundamentally sound," Mishra told CNBCTV18.com.
Out of the year's IPOs so far, one in four have been subscribed at least 100 times, And there is a long list of IPOs lined up in the remainder of the year.
On the other hand, here are some of the worst performers:
|Company||Issue Price||Listing price (BSE)||Discount at debut (%)||IPO Subscription|
|Nuvoco Vistas Corporation||570||471||-17||2|
|Kalyan Jewellers India||87||73.9||-15||3|
|Suryoday Small Finance Bank||305||293||-4||2|
|Indian Railway Finance Corporation||26||25||-4||3|
|Anupam Rasayan India||555||534.7||-4||44|
Retail participation gaining momentum
"Retail interest in IPOs has been growing over the past few months aided by the hefty listing premium in most IPOs. Also, new investors want to participate in new-age companies and IPOs are the best way to start taking a small exposure," Deepak Jasani, Head of Retail Research at HDFC Securities, told CNBCTV18.com.
The listing premium of Paras will only help fortify that process, said Jasani, who expects this trend to continue "till a few hyped IPOs list at a discount consecutively".
|Company||Subscription (No. of times)|
|Overall||Qualified institutional buyers||Non-institutional investors||Retail investors|
|G R Infraprojects||103||169||238||13|
|Clean Science and Technology||93||156||206||9|
|Tatva Chintan Pharma Chem||180||185||512||35|
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Hemang Jani, Head of Equity Strategy, Broking and Distribution at Motilal Oswal Financial Services, likes Paras Defence given the company's complex and wide product portfolio, presence in the niche defence/space, strong client relationship and high entry barriers.
"Given the huge impetus on the defence by the government, the stock presents a good opportunity for investors to participate in this niche space," Jani said.
Meanwhile, Aditya Birla Sun Life AMC's IPO was subscribed more than five times. The portion reserved for QIBs was subscribed 10.4 times and that for non-institutional investors 4.4 times. The retail investors' category saw a subscription of 3.2 times. Shares are likely to make a secondary market debut next week
First Published: IST