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India’s largest stock exchange National Stock Exchange (NSE) has filed draft prospectus with capital market regulator SEBI after much deliberation. The IPO aims to raise INR10,000 crore (INR100 billion) through the offer for sale (OFS) route and will offer an exit to several shareholders. This will put the upcoming public offer among the largest IPOs in India in recent years. Here is a look at the biggest IPOs since 2010 in India :
Coal India – leader among the biggest IPOs since 2010
Coal India is not just the largest offer after 2010 but takes the top position in the list of biggest IPOs since 2010 of all times. When Coal India came up with its INR15,199 crore IPO in 2010, it was met with suspicion and doubts if such a massive IPO could be pulled off without causing liquidity crunch in the market. Investors’ doubts were not without a reason as the last big IPO of Reliance Power a couple of years back failed spectacularly. In fact, the employee quota in Coal India IPO was subscribed just 10.8% in an indication that concerns were running high even within the bluechip PSU.
Nevertheless, the IPO received strong backing from institutional and HNI investors and investors were rewarded with strong listing gains. Moreover, retail investors received additional discount of 5% on offer price of INR245. With effective allotment price of INR232.75 per share, retail investors booked handsome gains as the stock listed at INR287.75 per share and touched an intraday high of INR340 per share.
ICICI Prudential Life Insurance
ICICI Prudential Life Insurance concluded the second biggest IPO in recent years by raising INR6,056.8 crore in September 2016. As the year turned out to be full of blockbuster IPOs, the life insurance company decided it was a good time to launch the IPO. The IPO received a strong response from all categories of investors but steep pricing of the offer resulted in disappointment among shareholders. The company sold shares at the price of INR334 per share without any discount to retail investors and closing price on the listing day was INR296.45 per share, meaning a discount of 11.2%.
The telecom tower infrastructure arm of Sunil Mittal’s Bharti Group raised INR4,172.7 crore in December 2012 through its IPO that was priced at INR220 for QIBs and INR210 per share for retail investors. Since several brokerage houses raised concerns about the valuations and the company’s business model, Bharti Infratel IPO did not receive massive oversubscription although it total subscription of 1.26 times was decent. Bharti Infratel listed at INR200 per share, causing investors to lose money. Retail investors were saved slightly as their cost price was lower due to the discount.
Following dismal performances in 2013 and 2014, sentiments in the IPO market revived in 2015 and the parent of no-frills airline IndiGo played a key role in this revival through its INR3,017.1 crore IPO. This was enough for the company to secure a place in the list of biggest IPOs since 2010.
InterGlobe Aviation, promoted by Rahul Bhatia and civil aviation veteran Rakesh Gangwal, brought the IPO in October 2015 in the price range of INR700 and INR765 per share. Like most big IPOs, retail investors were slightly cautious and rightly so since valuations were high and the company undertook some questionable decisions right before the IPO.
Nevertheless, InterGlobe Aviation rewarded investors with 14.6% gains on the listing day as shares closed the day at INR877.25 per share and gained further strength over the next month.
PNB Housing Finance
Another high profile IPO in 2016 came from the housing finance arm of Punjab National Bank (PNB) which raised INR3,000 crore through its IPO priced in the range of INR750 and INR775 per share. Since the IPO came at a time when the stock market and sentiments were at a high, it garnered strong support from investors as subscription of 20.4 times indicates. Despite the high price, PNB Housing Finance IPO did not disappoint investors as shares recorded listing day gains of nearly 15% with first day closing price of INR891.15 per share.
As we have seen above, listing gains of the biggest IPOs since 2010 are not consistent and a lot depends on valuations and market sentiment. These fundamentals are unlikely to change with the IPO of NSE. As the exchange inches closer to the much-awaited IPO, we will keep an eye on developments and bring our analysis.