What are the best-performing IPOs in India?

In India, the stock market has seen a rise in Initial Public Offerings (IPOs) over the past few years, with many of them offering substantial returns to investors. As an investor, understanding which IPOs have delivered exceptional performance can guide your investment strategy. In this blog, we’ll take a closer look at some of the best-performing IPOs in India and analyze what made them successful.

1. What Makes an IPO Perform Well?

Before diving into the top-performing IPOs, it’s important to understand what factors contribute to the success of an IPO. Generally, the performance of an IPO is influenced by factors such as market sentiment, the company’s financial health, its business model, the demand for shares, and the reputation of the underwriters. A strong brand, clear growth prospects, and sound financials often lead to a successful IPO. Additionally, the pricing of the IPO plays a critical role. If the issue price is set too high or too low, it can affect the demand and, consequently, the post-IPO performance of the stock.

2. Best-Performing IPOs in India

Here are some of the top-performing IPOs in India that have shown impressive gains for their investors:

• Zomato IPO: Zomato’s IPO, launched in July 2021, was one of the most talked-about IPOs in recent times. The food delivery giant raised over ₹9,000 crores in its IPO and was oversubscribed by over 38 times. The stock made an excellent debut, listing at a 53% premium to its issue price, and has continued to show strong growth, although it has experienced volatility due to market conditions.


• Nuvoco Vistas IPO: Nuvoco Vistas, a leading cement manufacturer, launched its IPO in August 2021. The company raised ₹5,000 crores through its offering. The stock was listed at a 30% premium, and it gained popularity due to the growing demand for cement and construction materials in India’s booming infrastructure sector.


• Dream11 (Fantasy Sports IPO): Dream11, the largest fantasy sports platform in India, went public in 2021. The IPO raised substantial interest because of the huge potential in the Indian online gaming and fantasy sports market. While the stock’s performance has been volatile, its potential for growth in the gaming sector has kept it on investors’ radar.


• UPI (Paytm IPO): Paytm's IPO in November 2021 was one of the most anticipated IPOs in India. However, despite the high expectations, the stock had a poor debut and fell below its issue price. This has sparked debates about the overvaluation of new-age tech stocks in the Indian market. While it’s still one of the largest IPOs in India, its post-IPO performance has been disappointing.


• Nykaa IPO: Nykaa’s IPO was launched in 2021 and proved to be a major success. The company raised ₹5,352 crores and was oversubscribed by more than 80 times. The stock made a solid debut with a 79% premium to its issue price and has continued to perform well, thanks to the growing e-commerce market and beauty industry.

3. How to Analyze IPO Performance?

To identify the best-performing IPOs, it is important to analyze their performance on multiple fronts. A few factors that play a role in determining IPO performance include:

• Price Movement: Checking the performance of the stock post-listing is one of the first indicators. Stocks that list with a premium and show steady growth are considered good performers.


• Long-Term Performance: A good IPO may show short-term gains but should also demonstrate long-term value for investors. Consistent growth, profitability, and market share expansion indicate a strong IPO.


• Company Fundamentals: The strength of the company’s balance sheet, revenue model, growth potential, and sector performance all influence the stock's future prospects.


• Market Conditions: The market environment also plays a significant role. Strong market conditions often lead to successful IPOs, while a weak market may cause an IPO to underperform, even if the company has strong fundamentals.

4. Conclusion

The best-performing IPOs in India have demonstrated strong growth and long-term value, but like all investments, IPOs come with their risks. Investors should evaluate each IPO thoroughly by reviewing the DRHP, understanding the company’s financials, and keeping an eye on market conditions. While some IPOs like Zomato and Nykaa have performed exceptionally well, others, like Paytm, have faced challenges. Always remember that past performance is not necessarily indicative of future results, so make sure to do your research before investing in an IPO.