Among the scores of recently launched IPOs, the participation of HNIs in terms of subscriptions has lagged behind other categories such as QIBs and retailers. For example, Ventive Hospitality’s public issue was oversubscribed by HNIs 13.87 times, while QIBs, RIIs, and employee segments fetched 9.08 times, 5.94 times, and 9.60 times of subscription respectively. It had received a total bid of 9.82 times. In another public issue, the Senores Pharma HNIs category fetched humongous demand and outperformed other categories with an impressive subscription of 96.30. Here is a summary of some IPOs where HNIs have outperformed other categories in terms of subscriptions:
- Mamata’s missions: HNI, 274.38 times; QIBs, 235.88 times; RIIs, 138.08 times; and 153.27 times from the Labor sector.
- Afcons Infra: HNI, 5.05 times; QIBs, 3.79 times; RIIs, 0.94 times; and 1.67 times subscriptions from Employees.
- Deepak Builders and Engineers: HNI registered 82.47 times; QIBs, 13.91 times; RIIs, 39.79 times.
- KRN Heat Exchangers: 431.63 times from HNIs; QIBs, 253.04 times; and RIIs 98.29 times.
- Diffusion Engineers: HNIs, 85.95 times; QIBs, 58.51 times; RIIs, 38.34 times; and 45.11 times by workers.
- Unicommerce eSolutions: HNIs, 252.46 times; RIIs, 130.99 times; and 138.75 times from QIBs.
- Indo Farm Equipment: HNIs, 501.75 times; RIIs, 101.79 times; and 242.4 times from QIBs.
Have you ever wondered what it means for investors and whether it affects the stock price on the day of listing? Here’s everything you need to know:
Many financial planners believe that high demand reflects investor confidence and indicates that IPOs or public issues are viewed as investment opportunities. This event also affects other businesses, especially those from the same area. It also shows that such companies can emerge to be listed and can lead to a new industry and market segment being represented on the exchange.
According to Srikanth Subramanian, Founder and CEO of Angel One’s Ionic Wealth, oversubscription plays an important role in increasing market access and overall market participation. “By 2021, about Rs 4 lakh crore is earmarked for IPO applications, about 10 percent of the market share of all companies listed on the Bombay Stock Exchange (BSE),” Subramanian told Zeebiz.com.
What motivates them to invest so much?
Srikanth observes that HNIs exhibit a different investment strategy, falling between retail and institutional approaches. They are drawn to IPOs as an opportunity to invest in early equity, seeking to capitalize on both long-term company growth and short-term listing benefits. For example, in 2021, HNIs showed an oversubscription rate of 141.9 times compared to QIBs (60.9 times) and retail investors (22.9 times).
Does it influence or influence market sentiment, affect the stock price on the first/listing day?
High HNI participation could lead to overall oversubscription, which could create noise in the market and, accordingly, could lead to higher trading prices and volatility in stock listings, analysts said. However, oversubscribing to one category, such as HNIs, can lead to gains in the portfolio but does not guarantee high returns, he adds. In recent years, the percentage of IPOs oversubscribed more than 50 times has increased significantly.
Subramanian explained that in 2023 there were 33 percent of IPOs that were oversubscribed 50 to 100 times, yet 15 percent of IPOs launched brought negative returns on their listing date, indicating that factors such as market sentiment, expectations investors, and the foundations of the company play a major role. important role in listing performance.
