IPO: Investing in coffee cans may not be a good idea for mega IPOs

Of the country’s 30 largest IPOs with issue sizes between Rs 4,000 crore and Rs 20,000 crore so far, 18 have lagged behind the company’s performance. Nifty index 500according to a study by Capitalmind Financial Services.

Stock returns were calculated based on an investor’s purchase in the IPO and holding them. Total returns include dividends reinvested in the stock.

According to the Capitalmind study, the largest have been the least lucrative for investors who subscribed to the IPOs. Eight of the top 30 IPOs are still making losses, including Power of Trustwhich has fallen 84% since the listing date. The smallest IPOs on the list have tended to beat their benchmarks,

“Given that most big-ticket IPOs have higher value relative to earnings, there is pressure to deliver earnings growth in the medium term post-IPO,” said Anoop Vijaykumar, head of research at Capitalmind Financial Services.

Vijaykumar said usually big IPOs come at a later stage, 18-24 months after the bull market, when investors have a reasonable appetite for stocks and high expectations of IPOs and soak up liquidity. “If the tide changes, the impact will also be greater,” he said.India Coal and Zomato are among those that have outperformed the Nifty 500 index.Hindustan AeronauticsIndian Railway Finance Corporation, Sona BLW Precision Forgings and ICICI Lombardo They were among the other companies that outperformed the index.

Five of the top 10 IPOs ranked by profitability, including Home Financing in Bajaj, Bharti Hexacomand Brainbees (FirstCry), were released in the last two years.