Tracing the past 5 biggest IPOs in India
Initial public offerings (IPO) are market events that most investors look forward to. In 2024, India's IPO market saw a significant growth, with over 260 companies raising more than $9 billion, more than double the amount from the previous year. The IPOs have attracted considerable investor interest, with some offerings like Jyoti CNC Automation and Premier Energies achieving gains of up to 250% and 146.93%, respectively, since their listing. Retail investors have played a crucial role in this success, with new stocks delivering an average gain of about 57% since their debut, significantly outpacing broader market averages. Notably, Hyundai Motor India is set to launch the largest IPO in Indian history, aiming to raise up to ₹27,855 crore. In the light of this, let us look at the five biggest IPOs in India and how have they fared so far.
1. Life Insurance Corporation (LIC)
The IPO of state-owned insurance giant LIC in 2022 broke all records to become the biggest IPO in India at that time. LIC offered 316 million shares to the public from May 4-9, 2022, in a price band of ₹902-949 per share. Policyholders and retail investors were offered a discount.
The IPO was overall subscribed nearly 1.5 times, receiving bids worth ₹2.95 lakh crore against the offer size of ₹20,557 crore. LIC debuted on the stock exchanges on May 17, 2022, at ₹867 per share, down 8.5% from the IPO price. Since listing, LIC shares have trended lower due to market volatility and now trade around ₹620 apiece.
2. One97 Communications (Paytm)
Fintech firm Paytm owned by One97 Communications held the record for the largest IPO in India before LIC's offering. Paytm raised around ₹18,300 crore in November 2021 through a combination of fresh issue of shares worth ₹8,300 crore and an offer for sale of ₹10,000 crore by existing shareholders.
The price band for the IPO was fixed at ₹2,080-2,150 per equity share. Paytm shares debuted on the bourses on November 18, 2021, at ₹1,956 apiece, a 9% discount to the IPO price. The stock has plunged further since listing and is now trading over 60% below its IPO price.
3. Coal India
The Coal India IPO in October 2010 was the biggest public offering in India at that time. The government divested 10% of its stake in Coal India through the IPO and raised over ₹15,000 crore. Against 631 million shares on offer, the IPO received tremendous response with bids for over 2.4 billion shares.
Coal India shares got listed on November 4, 2010, at ₹287 on the NSE, a huge 40% premium over the IPO price of ₹245. Buoyed by strong coal demand, the stock price increased steadily after listing. Coal India shares still trade around 3 times their IPO valuation.
4. Reliance Power
The power generation focused Reliance Power came out with its mega IPO in January 2008 to raise ₹11,700 crore. The IPO saw 260 million shares being offered in the price band of ₹405-450 per share. Backed by Reliance Group's reputation, the IPO received bids for over 19 billion shares, resulting in a subscription of 73 times. However, Reliance Power shares have drastically underperformed after debuting in February 2008 at ₹600 against the IPO price of ₹450. Weighed down by high debt, project delays and losses, the stock has tumbled over 90% from its listing price.
5. General Insurance Corporation of India (GIC Re)
The IPO of state-owned reinsurance company GIC Re in October 2017 was the fifth largest public offering raising over ₹11,000 crore. The IPO offered 123 million shares to investors in a price band of ₹855-912 per share. The GIC Re IPO was overall subscribed 1.38 times by institutional and retail investors. GIC Re shares listed on October 25, 2017, at ₹850 per share on the NSE, down 7% from the IPO price of ₹912. However, the stock has gained over 55% since listing on the back of improved market conditions and steady financial performance.
The Hyundai IPO - Largest ever in India
Hyundai Motor India Ltd, the Indian subsidiary of Hyundai Motor Company, is coming up with an IPO that is set to be the biggest ever in India. The company is targeting a valuation of $19 billion through the IPO. Hyundai plans to raise up to $3.3 billion or about ₹27,000 crore by selling 17.5% stake or 142.2 million shares in the price range of ₹1,865-1,960 per share. The IPO dates are October 15-17, 2022, with the shares expected to start trading on October 22.
Unlike earlier IPOs, the Hyundai IPO proceeds will fully go to the parent company in Korea since no new shares are being created. The offer comes at an opportune time when market conditions are favourable, supported by strong economic growth in India.
If successful, the Hyundai IPO will surpass LIC's previous record as the largest IPO in the country. The mammoth share sale will also showcase the ability of Indian capital markets to absorb large size public issues. Hence, the Hyundai IPO is a highly anticipated offering in the Indian context.
Summing up the IPO journeys
Some of the biggest IPOs in India like LIC, Paytm and Coal India have raised billions of dollars and attracted huge investor interest. Hyundai Motor India's upcoming IPO is poised to be the largest ever public offering in the country. While earlier IPOs have had mixed success, the Hyundai IPO comes at an attractive time for the Indian economy and markets. The share sale will be a good indicator of investor appetite for large offerings and mark a major milestone for India's capital markets.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
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