Mumbai: Subscribing to large initial public offerings (IPOs) and holding them forever may not be a sure-shot way to make strong returns from these issues.Out of the country's 30 largest IPOs with issue sizes between ₹4,000 crore and ₹20,000 crore so far, 18 have lagged the performance of the Nifty 500 index, according to a study by Capitalmind Financial Services.The returns on the stock were calculated based on an investor buying in the IPO and holding them. Total returns include the dividends reinvested into the stock.According to the Capitalmind study, the largest ones have been least lucrative for investors who subscribed to the IPOs. Eight of the top 30 IPOs continue to make losses, including Reliance Power, which has fallen 84% since the listing date. The smaller IPOs in the list have tended to beat their benchmarks,"Since most big-ticket IPOs are valued higher relative to earnings, there is pressure to deliver on earnings growth in the medium-term post the IPO," said Anoop Vijaykumar, head of research at Capitalmind Financial Services.114297314Vijaykumar said usually, the big IPOs come in at a later stage of around 18 to 24 months into the bull market when investors have a reasonable appetite for equities and high expectations from the IPOs and suck up the liquidity. "If, and when the tide turns, the impact is larger too," he said.Coal India and Zomato are among the ones that have outperformed the Nifty 500 Index.Hindustan Aeronautics, Indian Railway Finance Corp, Sona BLW Precision Forgings and ICICI Lombard were among the other companies that beat the index.Five of the top 10 IPOs ranked by returns, including Bajaj Housing Finance, Bharti Hexacom, and Brainbees (FirstCry), were launched in the past two years.
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