Best Mainline SME IPOs: Returns and Subscription in last 5 years

Mainline IPOs have been around for some time, but it is the SME IPOs that have captured the interest of investors in recent times. If you look at even the toughest of markets, the SME IPOs have continued to attract buying interest from the retail investors and the HNI investors. One reason could be that many of these IPOs are very focused business models and hence the risk of diversification or loss of focus is quite low. The other reason is that many of these SME IPOs are also priced reasonably and hence they tend to leave something exciting for the investors on the table. That is evident from the average valuations that these SME IPOs are priced at.

We again look at the SME IPOs on the NSE and the BSE and give a combined picture for each of these years. Typically, unlike a mainline IPO that can be listed on the NSE and the BSE, the SME IPOs can be only listed on one of the exchanges under the SME segment. Here we look at in detail at the SME IPOs between the period 2018 and 2022. In each of these cases, we will look at the total returns which will be calculated to the current date, with no annualization of returns or any compounding factor imputed. Here are the best performing IPOs for the five calendar IPOs from 2018 to 2022, across all the SME IPO issues.

Best SME IPOs by subscription and returns – Calendar year 2022

Let us first look at the top 10 SME IPOs based on the extent of subscription during the calendar year 2022; with a break-up of the subscription.

One of the reasons many of the SME IPOs see such phenomenal subscription levels is the small size of the IPOs. That is evident if you look at the top 10 by subscription in the year 2022. However, that is not the only reason. The number of investors is much lower and even in the retail component the basic lot size is large enough such that only the better informed investors come into this space. That gives SME IPOs a knowledgeable crowd.

Let us now look at calendar year 2022 from the perspective of the best SME IPOs on the NSE and the BSE in terms of returns. As stated earlier, the returns would be point to point in all the cases and there would be no annualization or compounding factor inserted into it. Here are the 10 best SME IPOs by returns in calendar year 2022.

A quick glance at the return numbers would tell you that the returns on the SME IPOs have bene really attractive. In fact, the tenth best IPO in the year has multiplied the wealth more than 4 times for the investor. Of course, the high level of oversubscription also means that the chances of allotment are relatively lower, but the risk is worth it. The stocks are a lot more niche and focused in their sectoral mix in the SME IPO list.

Best SME IPOs by subscription and returns – Calendar year 2021

Let us first look at the top 10 top SME IPOs on the NSE and the BSE based on the extent of subscription during the calendar year 2021; with a break-up of the subscription.

As can be seen from the table above, the over subscription has been extremely robust in the calendar year 2021, although not of the same level as in 2022. Many of these were relatively very small sized IPOs, but the appetite across the HNI / NII category and the retail category is quite strong.

Let us now look at calendar year 2021 from the perspective of the best SME IPOs on the NSE and the BSE in terms of total point to point returns. As stated earlier, the returns would be point to point in all the cases and there would be no annualization or compounding factor inserted into it. Here are the 10 best SME IPOs by total returns in calendar year 2021.

There is an interesting pattern in the total returns to rankers in 2021. Remember, these are returns till date, so they have an advantage over 2022, but that is still acceptable. The point is that some of the outperformers at the top are more than 10 baggers with Knowledge Marine being a 29 bagger in less than 2 years. That is the kind of multi-bagger returns potential that is in the SME IPOs.

Best SME IPOs by subscription and returns – Calendar year 2020

Let us first look at the top 10 SME IPOs on the NSE and BSE based on the extent of subscription during the calendar year 2020; with a break-up of the subscription.

As can be seen from the table above, the over subscription has been extremely robust in the calendar year 2020, although it is nowhere close to the levels of 2022. However, it is quite apparent that the general popularity of SME IPOs has not yet picked up in 2020 and the pandemic would only have dampened the sentiments further.

Let us now look at calendar year 2020 from the perspective of the best SME IPOs in terms of total point to point returns offered. As stated earlier, the returns would be point to point in all the cases and there would be no annualization or compounding factor. Here are the 10 best SME IPOs by total returns in calendar year 2020 on the NSE and the BSE combined. These are ranked on total returns.

What needs to be noted here is that much of the outperformance by stocks in the SME segment has come despite the subscriptions not being too encouraging. Also, if you compare the top list by subscriptions and the top list by returns, there is hardly any established relationship that is coming out of the comparison. Clearly, the returns are more about how much is left on the table rather than how many times it is subscribed.

Best SME IPOs by subscription and returns – Calendar year 2019

Let us first look at the top 10 SME IPOs on the NSE and the BSE based on the extent of subscription during the calendar year 2019; with a break-up of the subscription.

As can be seen from the table above, the over subscription has been substantial only in the top SME IPO and all the other IPOs have seen only single digit subscription levels. However, the good thing is that there has been interest across the HNI and the retail segments. That is understandable considering that these are the early years and hence there was not much traction in the SME IPOs. Also, 2019 was a tough year for investors.

Let us now look at calendar year 2019 from the perspective of the best SME IPOs in terms of total point to point returns. As stated earlier, the returns would be point to point in all the cases and there would be no annualization or compounding done. Here are the 10 best SME IPOs on the NSE and the BSE combined by total returns in calendar year 2019.

Once again, the top SME IPOs of 2019 have been solid performers as can be seen from the table above. Even the IPO ranked tenth in the ranking has appreciated 3 times on a point to point basis. Many of these SME IPOs are extremely small sized companies which are using this platform to eventually graduate to the mainboard IPO list. Overall, the returns offered by the SME IPOs have been the stand out feature of these issues.

Best SME IPOs by subscription and returns – Calendar year 2018

Let us first look at the top 10 SME IPOs based on the extent of subscription during the calendar year 2018 on the BSE and the NSE; with a break-up of the subscription.

As can be seen from the table above, the over subscription has been good for a handful of stocks but year 2018 was overall a tough year and there was a lot of pressure on the retail side of the IPO markets. Despite these challenges, the year 2018 was a stellar year for SME IPOs and possibly it is true that SME IPOs have done very well a year after a good year for mainboard IPOs. That is also evident in 2022.

Let us now look at calendar year 2018 from the perspective of the best SME IPOs on the NSE and the BSE combined in terms of total point to point returns. As stated earlier, the returns would be point to point in percentage terms in all the cases and there would be no annualization or compounding factor inserted in these calculations. Here are the 10 best SME IPOs by total returns in calendar year 2018.

Interestingly, some of the IPOs of 2018 have been true top performers as of date. For instance, Bombay Super Hybrid has been a hundred bagger while Vinny Overseas has been a forth bagger and Garv Industries has been a 34 bagger. That is phenomenal returns even if you consider that someone had to hold on to these SME IPOs over the last 5 years.

Key takeaways from the SME IPO rankings of last 5 years

What are some of the key takeaways from the SME IPO rankings of the last 5 years. Here are some key points to note.

• The SME IPOs typically pick up traction a year after a boom period in the mainboard IPO business. For instance, 2017 was boom period for mainboard IPOs while 2018 was a boom period for SME IPOs. Similarly, 2021 was a boom period for mainboard IPOs while 2022 was a boom period for SME IPOs.
   

• The top performers in the SME IPO list have been real multi-baggers over time. This can be attributed to the niche business models as well as the low leverage levels and the rather focused business strategy of these companies.
   

• Lastly, there is not much of a direct linkage seen between returns on SME IPOs over the years and extent of the subscription levels of these SME IPOs. While there seems to be some random level of relationship, where is no guarantee that higher subscription means higher returns. These are specific alpha stories and they play out individually.