Initial public offering is a type of public offering where shares of a company are sold to institutional as well as retail (individual) investors. Through this process of floating an IPO, a privately held company becomes a publicly-traded company. An IPO is offered only to a limited amount of people and is generally capped. There is generally a minimum lot size to buy stock.
After the IPO, shares are traded freely in the open market at what is known as the free float. After a company is listed, it can further add more capital in many ways such as follow-on offerings. In this article, we will be looking at the biggest losers at IPOs in the year 2022 so far. Losers are determined only by their listing price compared to the IPO price and its current market price as of 30 June 2022.
Biggest IPO Fails in India 2022
Here is the list of IPOs which created a disaster in the stock market, these startups failed to be successful in the stock market.
1. Life Insurance Corporation
The public really has not grown past the LIC horror IPO. It was the most sought-after IPOs of the year and led to massive disappointment when it listed close to 80rs per share shorter than its IPO price. The IPO was oversubscribed by 2.95 times with a record-breaking 7.3 million applications received. The failure could be because of unrealistic expectations on the part of the company executives or their underwriting team.
2. Zomato Ltd
Even Though the stock had a good listing price when compared to its IPO price, Zomato ltd has been dropping in price ever since its listing, it is currently trading at around ₹55 per share while its IPO price was ₹76 and its listing close price was at ₹125. Zomato is one of those high loss-making companies that tried to recover its negative net worth by issuing a high-priced IPO. The issue was oversubscribed by more than 38 times in total and by 7.5 times by retail investors with an issue price of ₹76.
3. One 97 Communications (Paytm)
Paytm shares were offered at an IPO price of ₹ 2150, However, the shares were listed post IPO at only 1955. The horror story does not end here as the medium-term investors holding the share since its IPO have seen the share drop more than 3 times as the share is currently trading at around ₹685 as of 30th June 2022.
4. Star Health Insurance
Star health insurance is an Indian multinational health insurance company. Its shares were offered at an IPO price of ₹ 900. The listing price was at a moderate 903 ₹ at issue opening. Ever since the company became public, the shares have been dropping heavily. The shares are currently trading at ₹ 493.
5. Shriram Properties Ltd
Shriram Properties is a part of Shriram Group and was founded in 1995. It had an IPO price of ₹ 118 and an opening list price of ₹ 94. It has further dipped down concurrently to the stock market bloodbath and is currently trading at ₹ 65 per share.
6. Ethos Ltd
Ethos limited is a luxury watch brand founded in the year Ethos is the Largest Authorized Luxury Watches Retailer in India. Many investors showed interest in this stock despite its bad financial performance. It had an IPO price of ₹ 878 and an opening list price of ₹ 808. Currently, the shares are trading at ₹ 790.
7. Rainbow Children’s Medicare Ltd
Rainbow Children’s Medicare Ltd is an Indian chain of multi-speciality hospitals founded by Dr Ramesh Kancharla in the year 1999. The hospital’s main focus is pediatric and maternal healthcare services. It had an IPO price of ₹ 542 and an opening list price of ₹ 506. Currently, the shares are trading at ₹ 466.
8. Prudent Corporate Advisory
Prudent Corporate Advisory Services Ltd is a Chennai-based Mutual funds Advisory Services Platform that provides various services like independent retail wealth management services. It had an IPO price of ₹ 630 and an opening list price of ₹ 502. Currently, the shares are trading at ₹ 500.
9. AGS Technology
AGS Transact Technologies Limited is a Digital payment gateway company that was founded in 2002. They are known for providing customized products and services including merchant solutions and transaction processing services. It had an IPO price of ₹ 175 and an opening list price of ₹ 176. Currently, the shares are trading at ₹ 69.
10. Care Trade Tech
Care trade tech is an Indian online platform that is used to transact new and used cars. It was founded in 2009. . It had an IPO price of ₹ 1618 and an opening list price of ₹ 1600. Currently, the shares are trading at ₹ 590.