NSE IPO listing: People printed a lot of money through IPO in September, will NSE also earn bumper now?

NSE IPO Listing: September has proved to be an excellent month for stock market investors. Most of the IPOs that entered the market this month have made bumper earnings. According to statistics, more than 70 percent of the companies filled the wallets of investors on the day of listing. Now amidst this strong environment the much awaited IPO listing of National Stock Exchange (NSE) is going to happen. However, despite the upbeat market sentiment, NSE’s Gray Market Premium (GMP) is raising investors’ concerns.

Great record of September IPOs

If we look at Ace Equity’s data, very few of the 16 IPOs listed so far have disappointed. There were only five issues that were listed below their fixed price. All the rest gave positive returns to investors on the day of listing itself. The biggest name among these was ESDS Software Solutions. The share of this company came at the price of 429 rupees. It was listed at Rs 746 with 74% profit. Today this share is Rs. 1,703 level, which is a huge profit of 297% from the issue price. Similarly, Glass Wall Systems gave excellent returns with 70%, Karmatara Engineering with 44%.

A comeback was seen despite the poor start

Stock market trends show that a weak listing does not always mean a loss. Prasol Chemicals was listed at a 10% discount, but is now 4% above its IPO price. Symbiotic Pharma Lab also had a slow start, but today it is making a profit of 13%. At the same time, the listing gains did not last long in some cases. Pranav Constructions was listed at a premium of 31%, but has now fallen to 17% below the issue price. These figures show that the market has certainly returned, but not blindly.

A larger issue size will increase the challenge

In case of NSE, this earlier record of September is not fully applicable. The rest of the IPOs this month were much smaller in size. At the same time, NSE’s IPO is over Rs 22,561 crore. Such a big issue requires a lot of organizational demand for a bumper listing. Due to the large number of shares in the market, there is a huge supply pressure. The NSE IPO is an outright offer for sale (OFS), due to which the company will not receive any fresh funding. Although it received a good response from investors, it was oversubscribed 5.71 times overall based on QIB and retail investors.

What is the expert opinion?

The biggest concern for NSE is its falling GMP. At the time of announcement of the price band, the premium was very high, which has now come down to only around 2%. Rs. A premium of 2% over the upper price band of 1,785 indicates a very moderate listing. According to Avinash Gorakshkar, founder of Avinash Mentor Research Services, investors should keep expectations in check. Due to its large size, sudden giant leaps are difficult. At the same time, Master Capital Services’ Dr. Ravi Singh has drawn attention to his assessment. He says NSE is a strong business, but it is coming at a valuation of 43 times its earnings. Also, a large portion of the company’s revenue comes from options trading fees. In such a situation, future regulatory changes will be very important for this.