Recently Listed Good Quality Companies

Since the last 5 years, a lot of IPOs have come out and when I recently looked at the list, it seemed many good quality companies have got listed and I missed catching them. Here are a few:

Name	Brand/Use	IPO Price	Current Price
Sheela Foam	Sleepwell	680	1500
Music Broadcast	RadioCity	333	312
CDSL	Demat	149	267
Matrimony.com	Bharat Matrimony	985	745
Quick Heal	Antivirus	321	275
Mahanagar Gas	Piped Gas	421	809
Just Dial	Local Business	483	570
Thyrocare	Pathology Lab	446	570

Many of these companies are having a great brand and use and all of them are from different sectors of the economy. Even the business is generating pretty good ROCE and having a reasonable valuation. Make sure you keep an eye.

Recent IPO Performances

There has been flurry of activity on the IPO front recently and in my last post I already covered that there has been mixed results from two companies in auto ancillary sectors. I want to extend it to now cover all the IPOs between 2013-2018 and show where they stack. Here is the result:

Company	IPO Date	Issue Price	Current Price	Gain/Loss	Price 27 Oct
Repco Home	April 2013	172	598	247.7%	331
Just Dial	June 2013	483	448	-7.5%	437
Wonderla	May 2014	125	365	192%	267
Snowman Logistics	Sept 2014	47	49.45	5.2%	34
Sharda Cropchem	Sept 2014	156	406.7	160.7%	330
Shemaroo Entertainment	Oct 2014	170	479	181.76%	446
Monte Carlo	Dec 2014	645	532	-17.5%	347
Ortel Communication	March 2015	181	21.75	-88%	7
Adlabs Entertainment	April 2015	180	50.35	-72%	11
Inox Wind	April 2015	325	108.7	-66.55%	78
VRL Logistics	April 2015	205	424.3	106.7%	255
MEP Infra	May 2015	63	83	31.75%	42
UFO Moviez	May 2015	625	394.7	-36.85%	313
PNC Infratech	26 May 2015	378 (Pre split 5:1)	166.8	120.6%	127
Manpasand Beverages	July 2015	320 (Pre bonus 1:1)	395.4	147.1%	83
Syngene International	August 2015	250	615.6	146.25%	570
Power Mech Projects	August 2015	640	1028.95	60.75	820
Navkar Corp	September 2015	155	179.55	15.8%	67
Pennar Eng	September 2015	178	83.95	-52.85%	52
Shree Pushkar Chem	September 2015	65	219.45	237.6%	180
Sadbhav Infra	September 2015	103	134.45	30.5%	101
Prabhat Dairy	September 2015	115	179.95	56.25%	100
Coffee Day	November 2015	328	332.9	1.5%	260
Interglobe Aviation	November 2015	765	1407.8	84%	870
S H Kelkar	November 2015	180	240.65	33.7%	172
Dr Lal Path Lab	December 2015	550	847.7	54.1%	893
Alkem Lab	December 2015	1050	1969	87.5%	1940
Narayana Hrudayalay	January 2016	250	274.5	10%	220
Precision Camshaft	February 2016	186	101	-45.7%	60
Teamlease Services	February 2016	850	2647.9	211.5%	2514
Quick Heal	February 2016	321	333.2	4%	185
Bharat Wire Rope	April 2016	45	124.75	177.25%	72
Equitas Holdings	April 2016	110	156	41.8%	99
Thyrocare	May 2016	446	668.75	50%	560
Ujjivan Financial	May 2016	210	405.35	93%	181
Parag Milk Foods	May 2016	215	314.45	46.25%	251
Mahanagar Gas	July 2016	421	894.8	112.5%	814
Quess Corp	July 2016	317	1162.7	266.8%	686
L&T Infotech	July 2016	710	1592.9	124.35%	1656
Advanced Enzyme	August 2016	896 (Pre split 5:1)	254.6	42%	177
Dilip Buildcon	August 2016	219	1163	431%	382
S P Apparels	August 2016	268	369.7	37.95%	275
RBL Bank	August 2016	225	537.65	138.95%	500
L&T Technology	Sept 2016	860	1337.05	55.5%	1560
GNA Axles	Sept 2016	207	555.15	168.2%	353
ICICI Prudential	Sept 2016	334	433.2	29.7%	325
HPL Electric	Oct 2016	202	114.45	-43.35%	56
Endurance Techno	Oct 2016	472	1285.95	172.45%	1104
PNB Housing Fin	Nov 2016	775	1364.7	76.1%	700
Varun Beverages	Nov 2016	445	645.05	44.95%	760
Sheela Foam	Dec 2016	730	1517.55	107.9%	1500
Laurus Labs	Dec 2016	428	508	18.7%	340
BSE Limited	Feb 2017	806	812.05	1%	596
Music Broadcast	Mar 2017	333	387.8	16.45%	329
Avenue Supermarts	Mar 2017	299	1483	396%	1227
CL Educate	Mar 2017	500	211.55	-57.7%	113
Shankara Building	April 2017	460	1948.4	323.5%	1086
S Chand and Co	May 2017	670	401.6	-40%	194
HUDCO	May 2017	58	65.95	13.7	40
PSP Projects	May 2017	210	574.75	173.7	370
Tejas Networks	June 2017	257	336.35	30.9%	237
Eris Life	June 2017	603	765.35	26.9%	684
CDSL	June 2017	149	293.85	97.2%	239
GTPL Hathway	July 2017	170	152.75	-10.15%	85
AU Small Finance Bank	July 2017	358	731.65	104.4%	523
Salasar Techno	July 2017	108	388.55	259.77%	210
Security & Intelligence	August 2017	815	1180.65	44.9%	835
Cochin Shipyard	August 2017	432	530.95	22.9%	379
Apex Frozen Foods	Sept 2017	175	646.7	269.55%	340
Bharat Road Network	Sept 2017	205	179.75	-12.3%	116
Dixon Technologies	Sept 2017	1766	3463.2	96.1%	2084
Matrimony.com	Sept 2017	985	836.65	-15%	480
Capacite Infra	Sept 2017	250	361.35	44.55%	180
ICICI Lombard	Sept 2017	661	752.95	13.9%	800
SBI Life Insurance	Oct 2017	700	758.85	8.4%	570
Pratap Snacks	Oct 2017	938	1359.8	45%	1004
Godrej Agrovet	Oct 2017	460	703.25	52.9%	512
Indian Energy Exchange	Oct 2017	1650	1631.95	-1.1%	1600 (after split 160)
General Insurance	Oct 2017	912	711.9	-22%	634 (after split 317)
Reliance Nippon	Nov 2017	252	252.95	0%	160
Mahindra Logistics	Nov 2017	429	487.2	13.5%	550
Khadim India	Nov 2017	750	776.5	3.5%	594
HDFC Standard Life	Nov 2017	290	519.15	79%	360
Shalby	Dec 2017	248	217.55	-12.3%	149
Future Supply Chain	Dec 2017	664	700.15	5.5%	649
Astron Paper	Dec 2017	50	137.85	175.7%	110
Apollo Micro Systems	Jan 2018	275	232.3	-15.5%	116
Newgen Software	Jan 2018	245	239.3	-2.3%	232
Amber Enterprises	Jan 2018	859	1073.55	25%	837
Galaxy Surfactants	Jan 2018	1480	1446	-2.3%	1260
Aster DM Health	Feb 2018	190	170.95	-10%	159
HG Infra Eng	Mar 2018	270	336.35	24.6%	173
Bharat Dynamics	Mar 2018	428	405	-5.4%	283
Bandhan Bank	Mar 2018	375	506.45	35%	380
Hindustan Aeronautics	Mar 2018	1215	1125.8	-7.35%	746
Mishra Dhatu Nigam	Apr 2018	90	146.45	62.7%	108
ICICI Securities	Apr 2018	520	422.75	-18.7%	239

The table clearly shows that it has been a mixed bag for investors. Especially after October 2017, there has been 13 listings in green and 10 in red so 40% of the total IPO are in negative since last 6 months. This clearly tells that there is a froth in the primary market offerings.

The one that are in negative or very small gain but looks attractive from investment perspective to me are following:

• Just Dial
• Monte Carlo
• UFO Moviez
• Pennar Engineered Building Systems
• Precision Camshaft
• Quick Heal
• Advanced Enzyme
• BSE
• Music Broadcast
• GTPL Hathway
• Matrimony.com

There has been listings of many insurance companies including ICICI Lombard, Reliance Nippon, HDFC Standard Life, SBI Life Insurance and I see very high valuations for them currently except for General Insurance.

There has been some good listings such as Sharda Crop Chem, Mahanagar Gas, Manpasand Beverages, CDSL which happened at slight gains to the issue price and then based on performance, stock price ran away. In Warren Buffett's  language, I was thumb-sucking at that time and lost these opportunities. I did buy some like L&T Infotech at around 650, which is below IPO issue price, and now I am handsomely rewarded as the stock price is hovering around 1600.

Among all the companies, the most stellar of them is Avenue Supermart (DMart) which came with issue price of 299, listed at 590 and now trading at 1500. Some of the good returns has happened due to heavy overvaluation such as that in Dilip Buildcon, Teamlease Services, Quess Corp, PSP Projects, Shankara Building Products, Apex Frozen Foods, Astron Paper and many others from the above list including Avenue Supermart too. Many are trading at stratospheric valuation and would give big heartache to investors when the tide turns.

Updated on 27 Oct 2018: I have updated the list with latest price as of today since a lot of action has taken place in two months. I had already mentioned some names which looked overvalued at that time out of which only Astron Paper and Teamlease have not corrected much otherwise Dilip Buildcon has gone down by 70%, Quess by 40%, Apex Frozen by 50%, Shankar Building by 45% and even Avenue Supermart has corrected by 17.5%. Even the one that I found interesting such as Pennar, Quick Heal, Matrimony have gone down by 30% or more. The one which has withstood the carnage have been shown with green color and some of them were already in my portfolio such as Larsen & Toubro Infotech. Some I added in the correction such as Sharda Crop Chem, Precision Camshafts, Bharat Dynamics etc...

Some Thoughts on IPOs - Part 2

This is an extension to the first part of this post. Here are the ones excluded from yesterday's post:

Company	IPO time	Offered Equity	Times Subscribed	Raised Money	Market Cap Today
First Winner Industries	June 2008	31.02%	1.14	68.75 Crore	33 Crore
Niraj Cement Structurals	May 2008	31.42%	1.07	61.75 Crore	54 Crore
Sita Shree Food	March 2008	47.65%	2.41	31.5 Crore	20 Crore
Tulsi Extrusions	February 2008	45.62%	1.83	48.45 Crore	35 Crore
Bang overseas	January 2008	27%	1.13	72.45 Crore	68 Crore
Cords Cable	January 2008	27%	4.63	41.65 Crore	46 Crore
Porwal Auto	December 2007	33.11%	1	37.5 Crore	15.5 Crore
Precision Pipes	December 2007	35.71%	10.59	75 Crore	91 Crore
Kaushalya Infrastructure	November 2007	40.93%	5.884	51 Crore	39 Crore
Renaissance Jewellery	November 2007	37.99%	2.75	79.86 Crore	92 Crore
Dhanus Technologies	September 2007	21.37%	28.29	113.13 Crore	58 Crore
Magnum Ventures	August 2007	46.92%	2.75	52.92 Crore	33 Crore
Alpa Laboratories	July 2007	44.06%	0.945	64.6 Crore	25 Crore
Roman Tarmat	June 2007	25%	29.26	50.75 Crore	59 Crore
Vishal Retail	June 2007	16.85%	76.12	110 Crore	150 Crore
Nelcast	June 2007	25%	7	95.26 Crore	102.5 Crore
Decolight Ceramics	May 2007	42.98%	1.7	43.45 Crore	18.5 Crore
Asahi Songwon	May 2007	30.33%	2.12	33.5 Crore	36 Crore
Abhishek Mills	February 2007	29.27%	1.24	41 Crore	43 Crore

The total money raised by all these companies comes to about INR 3500 Crore. The market value of the same shares today is less than INR 900 Crore, 25% of original investment even after 4 years in some cases. Not just the fractional ownership, the whole companies can be bought today for less than INR 2900 Crore. This surely is just one side of the coin. There were some good issues too, like Educomp, ICRA, etc... which have given decent returns to investors but the risk was not worth taking.

Some thoughts on IPOs

This post is to highlight the fact how investors are fooled into investing in IPOs. The basic idea of the post is to show that some of the companies coming up with IPOs in the last 5 years raised more money in their IPOs than their total market cap today. Please have a look at the table:

Company	IPO time	Offered Equity	Times Subscribed	Raised Money	Market Cap Today
Raj Television	February 2007	27.5%	2.36	91.7 Crore	78 Crore
AMD Metplast	February 2007	42.16%	4.88	76.25 Crore	56 Crore
Oriental Trimex	February 2007	64.5	0.95	48 Crore	22 Crore
Evinix Accessories	February 2007	32.71%	3.4	42 Crore	35 Crore
Broadcast Initiatives	February 2007	44.27%	2.36	102.6 Crore	36.5 Crore
Indus Fila	February 2007	25%	1.34	82.35 Crore	50 Crore
Euro Ceramics	February 2007	32.87%	2.86	92.75 Crore	71 Crore
Transwarranty Finance	February 2007	42.86%	1.52	31.2 Crore	19 Crore
Cinemax India	February 2007	31.86%	41.86	138.26 Crore	160 Crore
House of Pearl	February 2007	33.52%	3.67	362.83 Crore	172 Crore
XL Telecom	December 2006	26.07%	8.1	59.35 Crore	80 Crore
Ruchira Papers	November 2006	45.57%	2.53	28.5 Crore	19.5 Crore
Blue Bird	November 2006	25.07%	4.82	92.14 Crore	100 Crore
Global Vectra Helicorp	October 2006	25%	3.53	64.75 Crore	60 Crore
Hov Services	September 2006	32.3%	2.51	81 Crore	89 Crore
Lokesh Machines	May 2006	25.47%	19.37	42 Crore	52 Crore
R Systems	March 2006	32.57%	3.36	110.21 Crore	105 Crore
Uttam Sugar	March 2006	15.53%	4.63	136 Crore	156 Crore
Nitco Tiles	March 2006	44.9%	4.51	184.8 Crore	162 Crore
Nitin Spinners	January 2006	57.14%	16.51	49 Crore	29.5 Crore
Celebrity Fashions	December 2005	25.5%	23.6	81 Crore	35 Crore
Kernex Microsystems	December 2005	34.85%	22.95	99 Crore	105 Crore
Prithvi Information	December 2005	25.17%	15.27	135 Crore	116 Crore
SPL Industries	July 2005	31.03%	28.26	63 Crore	30 Crore

The list is so long my finger pains and I am not including more.

Investors bought fraction of a company at a price and today the whole company is available at a fraction of that price, after two-three years. I don't believe in Efficient Market Hypothesis, so I do believe some of the companies listed above and also some which have not been included are real bargain today. I would see if I find some bargains and list in the next post.