India’s best performing IPOs since the year 2010

Which have been the best performing IPOs in the Indian markets. The primary question that arises here is; what is the period to be considered. Obviously, the market was a very different story prior to the global financial crisis, so that period cannot really be compared with the present day. Also, the years 2008 and 2009 were highly volatile years as the markets fell about 60% and then started the recovery. Hence, these two years must be avoided. The focus here, therefore, is only on IPOs from 2010 onwards.

Secondly, a very short post listing tenure may not be a good barometer of IPO performance. You need some real performance in the market before you can arrive at a decision. Hence we have insisted on a minimum 5 years track record post listing. Hence, only IPOs up to the year 2017 have been considered, not after that. Also, the year 2019 onwards were tumultuous times and can distort post listing returns due to the pandemic induced volatility in the markets.

Top performing IPOs between 2010 and 2017 on total returns

Effectively, we will look at IPOs between the year 2010 and 2017 and the reference will be the closing prices as of 09th March 2023.

Data Source: NSE

The above are the top 15 IPOs on the mainboard and this ranking is based on the total absolute returns. These returns have been calculated on a point-to-point basis, without considering the post listing period. These are the 15 best performing IPOs based on total returns given by the IPO. Dividends (if any) have been ignored. Here are the broad takeaways from the ranking of top 15 IPOs on total returns between 2010 and 2017.

• Persistent Systems, a mid-sized IT company, is the best performer on total returns with 1454% returns. In terms of total returns, Persistent is followed by Thangamayil Jewellery, Avenue Supermarts, PG Electroplast and Cantabil Retail in that order.
   

• If you look at the timing of the IPOs, most of the top performers by total returns are concentrated in the 2010-11 period or the 2017 period. These were not only the peak period for IPOs, but also reflected many high-quality companies hitting the IPO market.
   

• There are some broad sectoral trends that emerge from the table above. For instance, out of the top 15 companies between 2010 and 2017, there are 3 companies from the IT sector and 3 companies from the retail sector. Other than that, the rest of the best performing IPOs do not display any sectoral bias.

However, the above analysis of IPOs is based on point-to-point returns and that does not distinguish based on the time factor. An IPO issued in 2010, obviously, has much higher chances of topping the returns chart compared to an IPO in the year 2017. Hence a better alternative would be to consider CAGR returns instead of point-to-point returns.

Top performing IPOs between 2010 and 2017 on CAGR returns

Here we will look at IPOs between the year 2010 and 2017 and the reference will again be the closing prices as of 09th March 2023. However, here we look at the compounded annual growth rate (CAGR) returns, which is a better measure of wealth compounding.

Data Source: NSE

In the table above, we have shifted from total returns to CAGR returns. This gives a much better basis to compare companies over different time periods. The above are the top 15 IPOs on the mainboard and this ranking is based on the compounded annual growth rate (CAGR) returns. Dividends (if any) have been ignored. Here are the broad takeaways from the ranking of top 15 IPOs on CAGR returns between 2010 and 2017.

• This gives a better picture of wealth creation since it is based on annual compounding. Now Avenue Supermarts (the owner of D-Mart) emerges as the star performer on CAGR followed by other IPO stocks like CDSL, LTI Mindtree, GNA Axles and LTTS.
   

• Once you look at CAGR, you find the top five performers concentrated in the 2016 and 2017 period. This is a more decisive picture since it also incorporates the relatively shorter holding period.

A good IPO with a good pedigree and one that leaves value on the table for investors has the potential to create long term wealth. That is perhaps the biggest takeaway from these rankings.