Charterhouse Private Equity Five IPOs that shook up and shaped D-St sentiment all through last decade

The year was 2010. After public sector coal mining behemoth Coal India announced plans for a mega IPO, multiple worries eclipsed the excitement of a public offer that was too good to ignore. End Quote

(1888PressRelease) May 27, 2020 - But Dalal Street had some serious concerns: what would happen when the IPO opened on October 18? Would it drain liquidity from the secondary market? Would it be a success?

At the same time, such was the confidence on the issue that analysts had already started speculating when the stock would ..
The IPO created history, by becoming the biggest-ever issue in the domestic primary market and by generating 15.28 times subscription with bids worth a staggering Rs 2.36 lakh crore.

Coal IndiaNSE 0.56 % IPO might have been the biggest in Indian primary market history so far, but that ‘biggest’ title has shifted from one issue to another from time to time.

Let us look at the top five IPOs that added so many digits that most retail investors may not be able to write in numerical terms.

Coal India: The issue was sold between October 18 and October 21, and everyone wanted a pie of this pure play on the black gold. The Rs 15,475 crore IPO had left all market men predicting how much liquidity would it suck out from the secondary market. Coal India generated bids worth $53 billion, which was more than the GDP of 140 countries as of FY10. It was almost 10 times India’s health budget for 2010-11, five times India’s education budget and one-fourth the size of the Union budget itself.

At the close of the listing day (November 4, 2010), Coal India with a market capitalisation of Rs 2,16,241 crore, was the fourth most-valued company behind Reliance IndustriesNSE -0.67 % (Rs 3.61 lakh crore), ONGCNSE -1.10 % (Rs 2.93 lakh crore) and SBINSE -0.72 % (Rs 2.18 lakh crore).

Reliance Power: This IPO was sold between January 15 and January 18 of 2008 and was subscribed about 70 times. Before Coal India, this IPO enjoyed the status of the ‘biggest IPO ever’ title. But the Rs 11,560 crore issue had another distinction. It was subscribed within the first few minutes of its book-building process. In fact, by the end of Day 1 of the bidding process, the issue had received over 10 times subscription. The issue attracted over 5 million bids across categories, with aggregate commitment of over Rs 7,50,000 crore. With approximately 42 lakh shareholders, Reliance PowerNSE -2.70 % also had the largest shareholder base among all the listed companies.

However, the strong response to the IPO did not guarantee big returns. The stock slumped 17.22 per cent on stock market debut on February 11 2008 to close at Rs 372.50 on BSE. Retail investors, who were offered a Rs 20 discount, ended up on the wrong side of the deal. Despite all this, the stock ended up as the 15th most valued stock on Dalal Street for the day.

DLF: Third on the list was DLF (erstwhile DLF Universal). The over Rs 9,187.50 crore IPO had come at a time when the benchmark indices were headed for what would soon be the all-time high levels for the Sensex, and real estate stocks were soaring like there is no tomorrow. While DLF attracted fewer, 3.5 times, bids (between June 11 and June 14, 2007), the stock shot up 36 per cent in debut trade on July 5, 2007, before settling about 8 per cent higher on BSE. With its listing, DLF displaced UnitechNSE 4.00 % as the biggest listed real estate developer at that time. A few months later, the listing made promoter KP Singh the second wealthiest Indian after billionaire Mukesh Ambani. In terms of market capitalisation, DLF had become the eighth most valuable company on the listing day itself.

Cairn India: The 8,616 crore IPO ran between December 11 and December 15, 2006, and received the mutest response among top five big IPOs. At close, the IPO had failed to attract enough non-institutional and retail individual investors. The issue got subscribed 1.14 times, thanks mainly to buying by qualified institutional buying. The debut trade was worse, with the stock listing at a 12 percent discount to the issue price of Rs 160 and eventually closing 14 per cent down at Rs 137.50. The company was among the top 25 listed corporate at that point.

NHPC: The Rs 6,048 crore IPO had accounted for 31 per cent of the total Rs 19,535 crore raised by all IPOs in 2009. It was the second largest IPO in the country after the Reliance Power issue. This IPO that ran between August 7 and August 12, 2009, received spectacular response, as it received 23.7 times bids, with total non-institutional investor subscriptions of just 57 times.

The stock got listed at a 8.3 percent premium over its issue price of Rs 36 on September 1, 2009, before closing the day just two per cent higher. Before NHPCNSE -1.00 %, in August 2009, another power company Adani PowerNSE -3.65 % had witnessed a dull listing on August 20, 2009. Interestingly, that IPO had received nearly 22-times subscription.

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