By Surender Negi,
S
Retail investors in the country are increasingly placing their bets on SME IPOs rather than mainboard issues. Consider this: Of the 240 SME IPOs in 2024 (as of December 31), 36 (15%) received retail subscriptions of over 500 times, while 137 (57%) saw bids exceeding 100 times.
For 91 mainboard IPOs/FPOs, none saw a retail subscription of over 500 times. There was some demand in this segment as well with seven (7.6%) of them getting retail subscriptions of 100x or over but they could not rake up the big numbers like SME issues. While all the SME issues were oversubscribed by the retail investors during the year, four mainboard ones were undersubscribed, including Hyundai Motor India. Two SME IPOs are closing on the last two days of the year.
The trend seemed to have continued from the previous year, which also saw the retail lot log in bigger subscription numbers compared to the mainboard ones.
The retail rush in these offers is despite the fact that these issues have been on the radar of markets regulator Sebi & the exchanges and a slew of measures have been taken to curb the investor interest in the segment. At least three issues – C2C Advanced Systems, Trafiksol ITS Technologies and Solar91 Cleantech – saw their listing postponed or cancelled by the regulator/exchanges due to lapses in the listing process. The NSE, in July this year, capped the SME listing gains to 90% in a bid to bring stability to the debut trades.
However, the steps seem to have failed to deter the retail investors as was evident from the largest ever subscription of 2,200 times for the NACDAC Infrastructure issue recently, driven by the retail segment’s 2,503 times bids for the Rs 10-crore SME IPO.
For small retail investors, the minimum cost of investing in a mainboard IPO is about Rs 14000-15,000 for a single lot compared to over a lakh in an SME issue.
During the year, the small firms which debuted on the exchanges raised about Rs 8,700 crore. The mainboard IPOs, on the other hand, raised close to Rs 1.6 lakh crore.
Market experts have pegged a robust pipeline to the tune of Rs 1.58 lakh crore for mainboard IPOs in 2025,
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