An electronic ticker board indicates British pound to Indian rupee currency exchange rate outside the Bombay Stock Exchange building in Mumbai| Dhiraj Singh/Bloomberg
The Bombay Stock Exchange | Photo: Dhiraj Singh | Bloomberg
Text Size:

Mumbai: Indian stocks may be trading at record highs, but investors backing youth in the $2.1 trillion market are sitting on even bigger gains.
A gauge of newly public companies is beating the nation’s benchmark index by the most in at least a decade, as investors chase companies running niche businesses. The S&P BSE IPO Index, a gauge of shares in their first two years of trading, has risen more than three times the amount of the S&P BSE Sensex Index this year.

India IPOs are beating Sensex this year by most in decade
An online marketplace, a railway monopoly, a diagnostics chain and a micro-finance lender are among 11 companies that went public this year. Ten entrants are trading above their offer prices, and have given returns of up to 176%. In comparison, it has been a rough ride for the Sensex, which hit a six-month low in mid-September amid a slowing economy before rebounding to a new peak.

“The amounts raised by these companies were small and they offered a unique business proposition for which a like-for-like comparison in the listed space was rare or absent,” said Sameer Kalra, President Research at Mumbai-based Target Investing.

State-run Indian Railway Catering & Tourism Corp. more than doubled on its debut last month, the best listing in two years. Investors offered to buy the entire firm 14 times over, lured by its monopoly over the ticketing, catering and supply of packaged drinking water to Indian Railways, Asia’s largest rail network.

Company Issue Price (Rs.) Offer to Date

Gain (%)

IRCTC 320 176
Affle (India) 745 84
IndiaMart 973 78
Neogen Chemicals 215 76
Metropolis Healthcare 880 60
Polycab India 538 59
Spandana Sphoorty Fin 856 53
Rail Vikas Nigam 19 25
Chalet Hotels 280 18

 

IndiaMart InterMesh Ltd., the country’s largest online platform for businesses, is trading 78% higher than its July IPO. Metropolis Healthcare Ltd., an operator of medical diagnostic centers backed by Carlyle Group, has soared more than 60% from its offer price in April.

“These companies are professionally run, are cash positive and carry almost no debt,” Kalra said. “The near-monopolistic and unique businesses won the favor of investors.”


Also read: Sensex set for a second consecutive record-high close


 

Subscribe to our channels on YouTube & Telegram

News media is in a crisis & only you can fix it

You are reading this because you value good, intelligent and objective journalism. We thank you for your time and your trust.

You also know that the news media is facing an unprecedented crisis. It is likely that you are also hearing of the brutal layoffs and pay-cuts hitting the industry. There are many reasons why the media’s economics is broken. But a big one is that good people are not yet paying enough for good journalism.

We have a newsroom filled with talented young reporters. We also have the country’s most robust editing and fact-checking team, finest news photographers and video professionals. We are building India’s most ambitious and energetic news platform. And we aren’t even three yet.

At ThePrint, we invest in quality journalists. We pay them fairly and on time even in this difficult period. As you may have noticed, we do not flinch from spending whatever it takes to make sure our reporters reach where the story is. Our stellar coronavirus coverage is a good example. You can check some of it here.

This comes with a sizable cost. For us to continue bringing quality journalism, we need readers like you to pay for it. Because the advertising market is broken too.

If you think we deserve your support, do join us in this endeavour to strengthen fair, free, courageous, and questioning journalism, please click on the link below. Your support will define our journalism, and ThePrint’s future. It will take just a few seconds of your time.

Support Our Journalism

Share Your Views

LEAVE A REPLY

Please enter your comment!
Please enter your name here