SBI Cards IPO next week; how India’s 5 largest IPOs fared so far? Hint: Only one gave positive returns

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Published: February 27, 2020 3:38:39 PM

Before SBI Cards and Payment Services IPO, Coal India, Reliance Power, GIC Re, ONGC and New India Assurance have been India’s largest IPOs

Sbi cards ipo, sbi cards and payment servicesSBI would divest up to 4 per cent stake in SBI Cards through this issue. Analysts believe that SBI Cards will benefit from the rising trend of digital payments and e-commerce.

SBI Cards and Payment Services IPO is poised to become the fifth-largest IPO in the country after Coal India, Reliance Power, General Insurance Corporation of India (GIC Re) and ONGC. Rs 10,000-crore worth of stake is on offer, with new share issue of Rs 500 crore. Currently, State Bank of India holds 74 per cent and CA Rover Holdings holds 26 per cent stake in SBI Cards. SBI would divest up to 4 per cent stake in SBI Cards through this issue. Analysts believe that SBI Cards will benefit from the rising trend of digital payments and e-commerce. “Strong growth, stable asset quality and superior return ratios provide comfort and justifies premium valuation. Further, being the first in the segment to get listed, it could generate high investor interest. Thus we recommend Subscribe to the IPO,” Motilal Oswal Institutional Equities said in the latest report.

Before SBI Cards and Payment Services IPO, Coal India, Reliance Power, GIC Re, ONGC and The New India Assurance Company have been India’s largest IPOs. SBI Cards will replace New India Assurance to become the fifth-largest IPO. Here’s how India’s largest IPOs have performed so far.

Coal India Ltd: The company’s shares were listed at Rs 287.75, while the issue price was of Rs 245. Coal India IPO was subscribed 15.17 times, and mopped up Rs 2.35 lakh crores. However, Coal India has given a disappointing performance since listing. Currently, Coal India shares are trading at Rs 171, which translates a negative return of 40 per cent from its listing price. The company had planned to raise around Rs 15,100 crores through this issue.

Reliance Power: Reliance Power launched its IPO on February 11, 2008 with an aim to raise around Rs 11,563 crores. On market debut day, Reliance Power opened at Rs 547.80 against its issue price of Rs 450 per share, delivering a premium of 21 per cent to the investors. But it failed to hold the gains on the listing day itself, as it closed at Rs 372.50, falling 17.22 per cent on BSE. Since listing, Reliance Power share price has plummeted drastically to Rs 1.77 apiece on BSE from Rs 547.80 per share, tanking almost 100 per cent from its listing price.

GIC Re: General Insurance Corp of India (GIC Re), India’s third biggest IPO, was launched on October 11, 2017 to raise Rs 11,370 crore. GIC Re raised Rs 11,256.83 crore by selling 124,700,000 shares through IPO. The stock was listed at Rs 850 per share on BSE. Currently, GIC Re shares are trading at Rs 183.05 per cent, declining 78 per cent from its listing price. 

ONGC: As per the data available with Bloomberg, ONGC shares were listed on August 3, 1995 with a listing price of Rs 63.33. ONGC was the IPO which raised over Rs 10,000 crore. Currently, ONGC shares were trading at Rs 94.35, down 1.51 per cent. Since listing it has delivered around 51 per cent return to the investors, making it the only IPO among the top five largest IPOs in India to deliver positive returns.   

New India Assurance: New India Assurance IPO was launched on November 1, 2017, to raise Rs 9,585.82 crores. It was listed at Rs 750 per share on NSE, down 2.6 per cent from the IPO price for retail investors. Along with New India Assurance, 2017 witnessed the IPOs of five insurance companies- SBI Life Insurance Company, HDFC Standard Life Insurance Company, GIC RE and ICICI Prudential Life Insurance Company. Currently, New India Assurance shares were trading at 112.50 apiece, down 3.81 per cent. The stock has underperformed by giving a negative return of 84 per cent from its listing price.

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