Among the notable laggards, Om Freight Forwarders has fallen 27% from its issue price of Rs 135 after listing at a steep 40% discount on October 8. Glottis, which came at Rs 129 a share, is down 40% from the issue price, while BMW Ventures has dropped 35% from Rs 99. WeWork Management, Epack Prefab Technologies, Fabtech Technologies, Jinkushal Industries, and Pace Digitek too are trading below their offer prices, though to varying degrees. On the bright side are Tata Capital, albeit marginally after listing yesterday, Advance Agrolife, TruAlt Bionergy and Jain Resource Recycling, the only impressive issue that’s up nearly 50% from its issue price.
In contrast, LG Electronics, experts say is valued reasonably at a P/E of 35.1x FY25 earnings, given its dominant market positions: washing machines (33.5%), refrigerators (29.9%), air conditioners (20.6%), and microwaves (51.4%). The Rs 11,607 issue drawing bids worth Rs 4 lakh crore is a case in point.
Aishvarya Dadheech, Founder and CIO of Fident Asset Management, said the weak post-listing performance reflects “aggressive pricing and muted retail participation, rather than a broad deterioration in fundamentals.”
“LG Electronics was the only listing that struck the right balance between business strength, brand appeal, and valuation, coming at a reasonable 30-35x multiple compared to several others priced at 50–70x,” Dadheech said in a conversation with ETMarkets.
Dadheech noted that investors are becoming more discerning after repeated disappointments. “Retail investors are realizing IPOs are more about frenzy than fundamentals,” he said, adding that even LG’s retail subscription was only about three times. He also pointed out that the unlisted market has slowed sharply, while FIIs continue to show interest in quality names like Tata Capital and LG. “FIIs may be selling in secondary markets, but they are still buyers in good-quality primary issues,” he said.Rajesh Palviya, Senior Vice President of Research at Axis Securities, echoed similar concerns. “Companies haven’t left anything on the table. With markets already subdued, investors don’t see potential short-term gains, so many book profits immediately after listing,” he said.According to Palviya, most IPOs were priced at full or stressed valuations despite strong subscription during the offer period. “Retail investors have learned from the last few months that not every IPO is a sure-shot listing gain,” he said. “Some good companies have come, but many low-quality ones too, and people have burnt their fingers.”
He added that with limited liquidity and a weak secondary market, investors are entering IPOs with a short-term mindset. “If they don’t see a 10% gain on listing day, they prefer to exit immediately,” he said.
Looking ahead, both analysts expect issuers to take note of recent trends. Palviya said companies and bankers are likely to turn more pragmatic — opting for smaller issue sizes and more attractive valuations. Dadheech, meanwhile, remains constructive on the IPO market. “If promoters and bankers price issues sensibly, there will always be buyers,” he said, adding that stable macros and continued FII appetite should keep India’s primary market healthy, barring major external shocks.
In the week ahead, several notable IPOs and listings are scheduled. The Midwest IPO, with a total size of Rs 451 crore and an upper price band of Rs 1,065, opens for subscription on Wednesday, October 15, comprising both a fresh issue and an offer-for-sale component. On Thursday, October 16, two major listings are set to debut: Canara Robeco, with an issue size of Rs 1,326 crore, is expected to list with modest gains of around 7% based on GMP trends, while Rubicon Research, which raised Rs 1,377 crore, is likely to open at a premium of approximately 23% over its issue price. The week concludes on Friday, October 17, with the listing of Canara HSBC Life Insurance, where GMP trends indicate a flat debut, with marginal gains of about 2% over the issue price.
India’s initial public offering market is on track for a record-breaking October, with companies expected to raise over $5 billion, underscoring strong investor demand in one of the world’s most active equity markets. So far this year, Indian firms have raised approximately $11.2 billion through IPOs from January to September, according to Bloomberg data.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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