New Delhi [India], December 23 : The IPO markets this year made remarkable strides as the Small and Medium Enterprise (SME) initial public offerings (IPOs) (SME IPOs) have delivered impressive returns, outperforming large-cap and mid-cap stocks since their listing, according to a report by Motilal Oswal.
The report highlighted a significant 31 per cent increase in the aggregate market capitalization of SME stocks compared to their listing day prices. In contrast, the market capitalization of Main Board stocks has risen by just 10 per cent during the same period.
It said, "SME IPOs have outperformed since their listing. The aggregate market capitalization of all SMEs has increased by 31 per cent from the listing day, while Main Boards have risen by 10 per cent."
The report also noted that the Small-cap stocks have also shown robust performance, gaining 15 per cent since their listing. This growth surpasses the 6 per cent and 14 per cent returns recorded by large-cap and mid-cap stocks, respectively.
The report also delved into sector-wise performance, revealing that 70% of the sectors are trading above their listing day prices. Consumer Durables led the way with a remarkable 77 per cent increase, followed by Logistics (+57 per cent), Capital Goods (+51 per cent), Chemicals (+35 per cent), and Metals (+32 per cent).
Conversely, sectors such as Oil & Gas (-29 per cent), Non-Banking Financial Companies (NBFCs, -17 per cent), Hotels (-9 per cent), Retail (-8 per cent), and Private Banks (-6 per cent) have underperformed.
The year has been dominated by Real Estate, Utilities, Automobiles, Metals, and Public Sector Undertaking (PSU) Banks, which together contributed to 57 per cent of the total Qualified Institutional Placement (QIP) issuances so far.
The report further highlighted that this year more than two-thirds of the listed IPOs have delivered positive returns against their issue prices. Among the 78 Main Board IPOs listed so far, 54 (69 per cent) are trading at a premium to their offer prices. Notably, 11 of these IPOs are trading at a premium exceeding 100 per cent of their offer prices.
The strong performance of SME and small-cap stocks underscores their growing appeal among investors, who are actively seeking opportunities beyond traditional large-cap investments. The report recommends keeping an eye on sectoral trends and focusing on quality stocks for sustained returns in the evolving market landscape.
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