Retail buyers dump LIC, Nykaa, others
MUMBAI : A clutch of companies that eroded billions in shareholder wealth since their public listing has seen an exodus of retail shareholders, a Mint analysis of exchange data showed. At least 2.2 million retail shareholders, 73 large foreign institutional investors (FIIs), and 22 mutual funds sold shares of 12 large companies, including Nykaa (FSN E-Commerce Ventures Ltd), Life Insurance Corporation (LIC) of India and Paytm (One 97 Communications Ltd), since their initial public offerings.
The companies have seen combined investor losses of $80 billion during the period. “While the erosion in investor wealth somewhat indicates unfair IPO pricing, with their money stuck in such large listings, millions of public investors, especially retail, are now desperately waiting to exit and put in money in fresh IPOs as primary markets seem to be reviving," said the head of equity capital markets in India at a large US-based banking and financial services firm.
Investors in Nykaa and state-run LIC have seen the worst losses, the Mint analysis showed. These two companies alone saw investor wealth erosion of $34 billion and $23 billion, respectively, with their market values falling by 88% and 32% since their IPOs.
Other newly listed firms that saw wealth erosion include Paytm, EaseMyTrip (Easy Trip Planners Ltd), Star Health and Allied Insurance Company Ltd, PolicyBazaar (PB Fintech Ltd), Aditya Birla Sun Life AMC Ltd, Nuvoco Vistas Corp. Ltd and Sterling and Wilson Renewable Energy Ltd.
These companies have seen the value of their shares falling in the range of 42% to 89%, eroding almost $20 billion in investor wealth since listing. “Without clarity on improving profitability or business model, there is no visible chance of
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