How SME IPOs performed in February 2023
Last Updated: 2nd March 2023 - 06:21 pm
In our monthly analysis of SME IPOs (remember, mainboard IPOs were absent in February after the Adani Enterprises FPO was withdrawn), we cover SME IPOs that listed in the month of February 2023. How do we evaluate IPOs on the SME counter. You can evaluate based on returns, subscriptions or on basis of fundamentals. One can argue that fundamentals can be quite opinionated and hence that is best avoided for the time being. We will focus on the two more quantitative factors rather than just focusing on abstruse aspects of fundamentals of the SME company in question.
Obviously, we can either look at the returns or we can look at subscription levels. The market returns are the ultimate test, but then the time fame here is too short to purely apply a market test. Hence we will apply 2 tests viz. the test of stock market returns post listing and the test of subscription. Returns will be absolute and not annualized, as that can be misleading. We look at some of the trends emerging from the evaluation of returns and subscription for the month of February 2023. Let us start with a quick ranking of SME IPOs that listed in the month of February 2023, based on absolute point to point returns.
How February 2023 SME IPOs ranked on returns?
The table below captures the SME IPOs listed in February 2023 based on total returns. Here the raw returns over issue price have been considered and not the annualized returns. In other words, it is the point to point returns considered, irrespective of time since the IPO.
SME IPO |
Listing Date |
Issue Price |
Issue Size (Rs crore) |
Subscription |
Market Price |
Returns (%) |
Earthstahl and Alloys Ltd |
08-Feb-23 |
40 |
12.96 |
235.18 |
51.75 |
29.38% |
Gayatri Rubber and Chemicals Ltd |
07-Feb-23 |
30 |
4.58 |
37.94 |
37.15 |
23.83% |
Lead Reclaim & Rubber Products |
21-Feb-23 |
25 |
4.80 |
75.98 |
28.90 |
15.60% |
Shera Energy Ltd |
17-Feb-23 |
57 |
35.20 |
47.36 |
65.10 |
14.21% |
Transvoy Logistics India Ltd |
02-Feb-23 |
71 |
5.11 |
184.34 |
72.00 |
1.41% |
Agarwal Float Glass Ltd |
23-Feb-23 |
42 |
9.20 |
5.16 |
41.90 |
-0.24% |
Indong Tea Company Ltd |
21-Feb-23 |
26 |
13.01 |
4.97 |
19.65 |
-24.42% |
Data Source: NSE / BSE
What are the major takeaways? At a time when the main board IPOs have been virtually absent, there have been 7 IPOs of the SME category listed on the bourses in February 2023. The performance is still good because only 2 IPO has given negative returns with all the other IPOs giving positive returns post listing. Only one of them was decisively negative. Of course, these market prices are dynamic and hence are subject to change from time to time. However, this does give a macro idea that overall IPO pricing in the SME segment has been conservative enough to leave enough on the table for investors.
How February 2023 SME IPOs stacked up on subscription?
The table below captures the 7 SME IPOs listed in February 2023 based on total subscription (i.e. the number of time it was subscribed). This is the overall subscription, which is the combined subscription across retail and HNIs. In some cases, it includes the qualified institutional buyers (QIBs) too. Here is how these seven SME IPOs listed in February 2023 stacked base on the number of times subscription.
SME IPO |
Listing Date |
Issue Price |
Issue Size (Rs crore) |
Subscription |
Market Price |
Returns (%) |
Earthstahl and Alloys Ltd |
08-Feb-23 |
40 |
12.96 |
235.18 |
51.75 |
29.38% |
Transvoy Logistics India Ltd |
02-Feb-23 |
71 |
5.11 |
184.34 |
72.00 |
1.41% |
Lead Reclaim & Rubber Products |
21-Feb-23 |
25 |
4.80 |
75.98 |
28.90 |
15.60% |
Shera Energy Ltd |
17-Feb-23 |
57 |
35.20 |
47.36 |
65.10 |
14.21% |
Gayatri Rubber and Chemicals Ltd |
07-Feb-23 |
30 |
4.58 |
37.94 |
37.15 |
23.83% |
Agarwal Float Glass Ltd |
23-Feb-23 |
42 |
9.20 |
5.16 |
41.90 |
-0.24% |
Indong Tea Company Ltd |
21-Feb-23 |
26 |
13.01 |
4.97 |
19.65 |
-24.42% |
Data Source: NSE / BSE
Here again we have not distinguished between BSE SME IPOs and NSE SME IPOs but have considered both of them in the rankings. Incidentally, in February 2023, the top 2 listings in terms of overall subscription have been BSE SME IPOs. Out of the 7 IPOs listed in February 2023 from the SME segment one SME IPO was subscribed more than 200 times while two were subscribed more than 100 times. Only 2 out of the 7 SME IPOs got single digit subscription, but the positive takeaway was that not a single SME IPO got undersubscribed in February 2023. It must be noted that the number of SME IPO listings in February were much lower than in January (which saw 10 SME IPOs listed) and this can be attributed to the aftermath of the Adani saga.
Did subscription levels make a difference to returns?
In January 2023, one finding was that the subscription level did not really matter too much for performance beyond a point. That finding appears to be repeated in February 2023 also. Let us explain, the SME IPO with the highest subscription level (Earthstahl and Alloys Ltd) was also the IPO that gave the best returns among SME IPOs listed in February 2023 at 29.38%. But beyond that the relationship was not too clear. For instance, Transvoy Logistics India Ltd got subscribed 184.34 times but has given just 1.41% returns. Of course, the IPO with the lower subscription (Indong Tea Company) also saw the worst SME IPO returns of -24.42%.
However, apart from the extreme performers, the subscription level did not really impact the performance. At best the linkage is intuitive. What we can broadly surmise is that while the subscription levels have mattered, it has not been the only factor. For post listing performance, the real issue continues to be how much value the issuer has left on the table for the investors.
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Tanushree Jaiswal
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