These 5 Newly Listed Companies Turned into Multibaggers

The recent sell-off in the stock market has affected the demand for initial public offerings (IPOs).

Newly listed companies have received a cold response from market participants, compared to the strong reception seen earlier.

Last week, India's biggest IPO, Paytm made its debut on the secondary market. Since then, it has eroded Rs 511.9 bn in investor wealth from the IPO valuation of Rs 1.4 tn.

Due to the lukewarm listing, many retail and wealthy investors are now reducing investments in the primary market.

However, there are some recent debutants that held up when the benchmark indices took a downturn in response to fears of rising inflation around the world.

Many public issues of the year 2021 have been profitable for the investors and are trading above their issue price.

Let's take a look at some recent IPOs of 2021 that have turned multibaggers after listing:

#1 Sigachi Industries

Microcrystalline cellulose maker Sigachi Industries had a bumper listing on 15 November 2021 - way above analysts' expectations and grey market premium.

The stock opened with 252.8% premium at Rs 575 on the BSE against an issue price of Rs 163, making the biggest ever listing.

Sigachi is engaged in manufacturing microcrystalline cellulose (MCC) which is widely used as an excipient for finished dosages in the pharma industry. MCC has varied applications in the pharmaceutical, food, nutraceuticals, and cosmetic industries.

The company recorded a 49% growth in profit at Rs 302.6 m for the financial year 2021, compared to Rs 203.1 m in previous year, and revenue grew by 38.6% to Rs 1.9 bn in the same period.

Currently, the company share price is trading at Rs 511 apiece over the listing price of Rs 163.

#2 Paras Defence And Space Technologies

Shares of Paras Defence and Space Technologies made a dream debut on 1 October 2021 as the scrip got listed at Rs 475 on BSE against its issue price of Rs 175. This translates into a listing gain of as much as 171%.

The company, engaged in manufacturing and testing of defence and space engineering products, now holds the record for best-listing day performance as well as second most subscribed IPO after Latent View Analytics.

The Navi Mumbai-based company is also the sole Indian supplier of critical imaging components such as large sized optics for space applications. It has two manufacturing facilities in Maharashtra.

If you had applied for the public issue, your investment of Rs 14,875 (1 lot - 85 shares) would be worth Rs 58,000 considering the company's current share price of Rs 683.

#3 Tatva Chintan Pharma

Specialty chemical company Tatva Chintan Pharma doubled investors' money on the listing day, with the stock rallying 129.6% over the issue price of Rs 1,083 on 29 July 2021.

Since then, the stock of Tatva Chintan Pharma has surged 145% to Rs 2,640 per share from its issue price.

Tatva Chintan Pharma is a chemical manufacturing company that manufactures structure directing agents (SDAs), phase transfer catalyst (PTCs), pharmaceutical and agrochemical intermediates, and other specialty chemicals. It's among the largest manufacturer of SDAs for zeolites in India.

The company has a robust earnings growth outlook with strong market share, consistent focus on research and development (R&D), greater control over cost and strong long-standing relationships with key customers.

It you had applied 1 lot for Rs 14,079 during the subscription period of the IPO, today the worth of 1 lot would have become Rs 34,300.

#4 Laxmi Organic Industries

Shares of specialty chemical maker Laxmi Organic Industries were offered at issue price of Rs 129 to Rs 130 and they got listed on both BSE and NSE on 25 March 2021.

It listed on NSE at Rs 155.5 per equity share while on BSE it listed at Rs 156.2 per equity share.

So, to those investors who hold the counter till date, it has given around 2.8 times return at the current share price of Rs 430 over its listing price of near Rs 156 in just 8 months.

The specialty chemical maker deals in acetyl intermediates (AI) and specialty intermediates (SI) where it works at around 20% margin and it holds around 30% market share.

This got reflected in its quarter one of the fiscal 2022 results as well, when it reported Rs 1 bn quarterly profits, which is just Rs 250 m lower from its financial year 2021 profit.

Apart from this, the company has order book completely full to its capacity for next one to one and half years.

#5 Stove Kraft

Kitchen appliance maker Stove Kraft got listed at Rs 467 on BSE on 5 February 2021, a premium of 21.3% over the issue price of Rs 385 apiece.

Over the period of last 10 months, shares of Stove Kraft has delivered multibagger return as the stock has surged over 110% till date.

Stove Kraft is engaged in the business of manufacturing and selling kitchen & home appliances products.

The firm reported September 2022 quarter revenue growth of 53% year on year (YoY), driven by growth across all channels - general trade, modern retail and e-commerce.

Stove Kraft's management stated that it's possible to clock that 20-25% volume growth going forward and margin would be normalised at 13-14%.

Apart from the above list, here's a look at the IPOs of 2021 that turned multibaggers.

Company	Issue Price	Current Share Price	Returns (%)
G R Infraprojects	837	1,880	124.6
Clean Science and Technology	900	2,108	134.2
Macrotech Developers	486	1,886	288.0
Barbeque Nation Hospitality	500	1,529	205.7
Nazara Technologies	1,101	2,245	103.9

Source: Equitymaster

To know more about the IPOs, check out Equitymaster's best performing IPO stocks screener.

Will the IPO craze continue?

The recent downturn in new listings over the past few days may not be a signal of fatigue in the IPO space.

Some analysts believe there is sufficient liquidity in the market, and investors are still prepared to take a chance on high-quality IOPs at reasonable prices.

On the other side, some investors believe the recent IPO underperformance will have an influence on future public offerings and stock market listings.

Given the recent unimpressive listings, retail investors and HNIs may not show the same kind of excitement in the future.

However, if a few high-quality, well-valued IPOs enter the market and offer investors with listing profits, the sentiment can improve.

To know more about the performance of recently listed IPOs, check out Equitymaster's newly listed businesses screener.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...