The recent stock market turmoil, known as Black Monday, has affected newly listed IPOs.
One such company, Quality Power Electrical Equipments Limited, had a disappointing stock market debut, failing to meet investor expectations.
The company’s stock, initially priced at Rs 425 per share, was listed at Rs 432 on the BSE and Rs 430 on the NSE, reflecting only a modest 2% gain.
However, due to the market downturn, the stock soon dropped to Rs 405—5% lower than its IPO price. As of now, the company’s market capitalization is Rs 3,136 crore.
IPO Subscription and Fundraising Details
Quality Power Electrical’s IPO was open for investment from February 14 to February 18, raising Rs 858.70 crore. This amount came from two sources:
New Share Issuance: Rs 225 crore was raised by issuing 0.53 crore new shares.
Offer for Sale (OFS): Rs 633.70 crore was raised by selling 1.49 crore shares through an OFS.
The company set its issue price at Rs 425 per share, with a face value of Rs 10. However, investor response was lukewarm, with the IPO being subscribed just 1.29 times in total:
Institutional investors: 1.03 times
Non-institutional investors: 1.45 times
Retail investors: 1.82 times
Stock Market Volatility and IPO Performance
The ongoing stock market downturn has pushed several newly listed stocks below their issue prices, though some exceptions exist.
For instance, IT company Hexaware Tech had a successful listing last week. Priced at Rs 708 per share, its stock is now trading at Rs 826, giving investors a 17% return despite market instability.
On the other hand, Ajax Engineering has struggled. Its stock, listed at Rs 629, has fallen to Rs 597, leading to a 5% loss for investors.
With continued market volatility, new IPOs face significant challenges, making investors more cautious about their participation.
