Paras Defence, MTAR Technologies most successful IPOs this year

It’s raining IPOs and so is the money! The initial public offers this year have given spectacular returns. Many of these IPOs saw investors’ money getting doubled on the listing day. Companies have raised record money through IPO route this year. The primary market was supported by good performance of the secondary market as the profitability grew on listing. Technology-based and new age companies were the highlight of this year’s IPO.

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As per Mohit Ralhan, Managing Partner & Chief Investment Officer of TIW Private Equity,  the best performers has been Paras Defence and Space Technologies and MTAR technologies, which generated return of over 300%.

Earlier in March this year, shares of MTAR Technologies had made a strong debut on the BSE and NSE in March at over 80 per cent premium against their issue price. Similarly, Paras Defence and Space Technologies too made a stellar debut by listing at Rs 469 at nearly 170% premium against its issue price of Rs175 per share.

“The year 2021 has been a watershed year for IPOs in India. Till the end of November, as many as 53 IPOs have raised close to US$ 15 billion, making it the best year for mobilising funds through IPOs. It also indicates the increasing confidence of investors - institutions, HNIs and retail alike – in the growth story of India,” said Mohit Ralhan

The portfolio of 2021 IPOs would have given a return in excess of 35%, with 39 out of the 53 IPOs generating positive returns till the end of November, he said.

“While the IPOs in technology and digital industries were the largest and most talked about, there was an extremely healthy sector spread that included healthcare, speciality chemicals, manufacturing, agrochemicals, consumer, financial services and infrastructure among others.

Speaking on the negative return by some IPOs, especially Paytm, Ralhan said, “A lot has been written on the negative returns generated by Paytm’s IPO, but it just reminds the fact that investors need to always keep their guards on. The large size of Paytm’s IPO coupled with a complex business model and high valuation metrics dampened the performance post listing. In spite of this, the IPO story of India races ahead and the IPOs which were launched after Paytm, such as Go Fashion and Tega Industries proved to be extremely successful. This augurs well for 2022, which is expected to be even bigger with the likes of LIC, Ola, Byju’s and Delhivery expected to take the IPO route.”

As per Ralhan, India is home to 79 unicorns and 2021 alone has given birth to 42 unicorns.

“India is the third-largest startup hub in the world and has developed a strong ecosystem of entrepreneurs & venture capital investors, supported by favourable government policies, which will continue to feed into India’s accelerating IPO boom. The story has just begun, and the future looks quite bright,” said the market expert