SME IPOs Outshine Mainboard with 63% Gains in H1FY25

IPOs have proven highly rewarding for investors in the first half of FY25, with both mainboard and SME segments seeing a surge in average listing gains.

Data from Prime Database reveals that mainboard IPOs posted an average listing gain of 34.28% in H1 FY25, up from 28.65% in the same period last year. Standouts like Bajaj Housing Finance, Unicommerce Esolutions, and Premier Energies saw gains of 136%, 94%, and 87% respectively on listing day.

Sustained momentum has led to 30 out of 38 IPOs currently trading above their issue price, with an average return of 41% by the end of September.

Strong market sentiment, fueled by a rally in Indian equities, and high demand led to oversubscription for most IPOs. Out of 38 IPOs, 35 were subscribed over 10 times, and 17 were oversubscribed by more than 50 times. Retail investors also played a major role, with the category's average oversubscription reaching 33.02 times, compared to 28.27 times last year.

The SME segment outperformed the mainboard with average listing gains jumping to 63% in H1 FY25, compared to 41% last year. By the end of September 2024, 94 out of 131 SME IPOs were trading above their issue price, with an overall average gain of 92%. Subscription numbers for these smaller issues also soared, with an average oversubscription of 208 times, compared to 72 times a year ago.

Analysts expect IPO fundraising to break records this fiscal year, with a strong pipeline of offerings, including NSE, Swiggy, and Hyundai. Companies have already raised Rs 50,000 crore so far, double that of last year, and 26 more firms are expected to raise Rs 72,000 crore in the coming months.

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