New Delhi. The year 2024 may prove to be historic in terms of funds raised through IPOs, but it has so far proved to be a failure in terms of returns. 40% of the shares listed in the year 2024 are currently trading below their issue price. That is, investors who invested money in these IPOs are now at a loss. The shares of more than two dozen companies listed in the market this year have fallen sharply since October. Many of these companies had given great returns on the day of listing, but now they have fallen below their issue price.

So far in 2024, 75 companies have raised more than Rs 1.2 lakh crore through IPOs. After reaching a record high in September 2024, the Indian stock market has seen a sharp decline. Sensex and Nifty have declined by more than 10%, while midcap and smallcap indices have declined by 8-9%. Due to rising 10-year bond yields in the US, FPIs have started withdrawing investments from the Indian market, reducing the gains and gray market premium (GMP) on IPO listings.

Investors in loss
According to a report by Moneycontrol, the share of Popular Vehicles and Services is trading 46% below the issue price. The share of Capital Small Finance Bank is trading at 38% and Acme Fintrade India is trading at 32% below the issue price. The share of Western Carriers is trading at 31%, RK Swamy at 29% and Deepak Builders and Engineers India is trading at 26% below the issue price. Similarly, the share of Saraswati Saree Depot has fallen 25% from its issue price.

ECOS India Mobility and Hospitality share registered a gain of 33% on the day of listing, but now it is trading 1% below the issue price. Similarly, the share of APJ Surrendra Park Hotels, which is to be listed this year, is trading 4% below the issue price while Ola Electric Mobility is trading 25% below. Northern ARC Capital 10 is trading 10% below the issue price.

Why is there a decline?
Apoorv Shet, Head of Market Research, at SAMCO Securities, says that the performance of the primary market is closely linked to the secondary market. Aggressive pricing of IPOs, declining listing gains and market decline have weakened investor confidence. Prashant Tapase, Senior Vice President, Mehta Equities, believes that in the current market conditions, investors are shying away due to fear of losses. Due to the decline in the secondary market, demand and subscriptions in the primary market are decreasing. As a result, investors are getting fewer returns than expected on the day of listing.