Performance of IPOs from 2020-2023

In the last 2-3 years, there was a mania around IPOs. A lot of people thought of them as guaranteed moneymakers. The news headlines of IPOs going up 100–200% are enough to induce greed. But do IPOs “always” make money?

We analysed IPOs that had an issue size of Rs 1000Cr+ in the last 3 years. Here’s what we found

If you invested in stocks during IPOs and held on them, you’d be losing a ton of money right now. Clearing buying and holding IPO companies is a terrible idea.

Returns from Issue price
Particulars Number of Stocks %
Negative returns 19 42.22%
0-10% 1 2.22%
10-15% 3 6.67%
15-25% 2 4.44%
>25% 20 44.44%
Total 45 100.00%

It’s the same when you consider the listing price too.

Returns from listing price
Particulars Number of Stocks %
Negative returns 22 48.89%
0-10% 4 8.89%
10-15% 3 6.67%
15-25% 1 2.22%
>25% 15 33.33%
Total 45 100.00%

Shockingly, not all IPOs had listing gains. 55% of all IPOs had negative or less than 10% of listing gains.

Listing Gains
Particulars Number of Stocks %
Negative returns 16 35.56%
0-10% 9 20.00%
10-15% 4 8.89%
15-25% 7 15.56%
>25% 9 20.00%
Total 45 100.00%

Stories will always lead you astray. It’s important to look at the data when making investment decisions. This reminds of a podcast of Professor Sanjay Bakshi in which he spoke about the same thing:

One of the great lessons from studying history is to do with “base rates”. “Base rate” is a technical term of describing odds in terms of prior probabilities. The base rate of having a drunken-driving accident is higher than those of having accidents in a sober state.

So, what’s the base rate of investing in IPOs? When you buy a stock in an IPO, and if you flip it, you make money if it’s a hot IPO. If it’s not a hot IPO, you lose money. But what’s the base rate – the averaged out experience – the prior probability of the activity of subscribing for IPOs – in the long run?

If you do that calculation, you’ll find that the base rate of IPO investing (in fact, it’s not even investing … it’s speculating) sucks! [T]hat’s the case, not just in India, but in every market, in different time periods.

A better alternative to picking IPOs would’ve been just to invest in low-cost broad market index funds and move on with your life:

You can access the IPO data here :point_down:


While I do acknowledge the research backed by data, I would say that each company was different at the time of entering the market, and as such, applying for them should be based on the assessment of individual companies.

One company might have been valued very high, while another deserved a high valuation, no comparison. Same goes with the future growth too.

Although if IPOs are looked at as purchasing something from a newly opened showroom, and that each stock will have listing gains, then yes, it is a loss making idea.

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Why are you analysing on the issue size >1000Cr+

Can’t you pull out the data for all the mainstream IPOs that have been put in between 2020-2023?

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Hi @jashjacob

Smaller issues tend to have higher subscriptions, which skews the results to a certain extent.

The idea was to show IPOs with some broad-based participation.

We’ll try posting the data for smaller IPOs.