SME IPOs see manic rise in retail interest
retail investors are now buying big into the initial share sales of high-risk small and medium enterprises (SME), an exclusive HNI bailiwick until recently, seeking to benefit from the stellar listing gains these issuances have lately been generating.
What was seemingly a very shallow and restricted market of less than 500 interested parties for each share sale on average four years ago now draws applications that run into six figures. Statistics show from just 408 applicants on average in FY20 and 511 in FY21, these SME IPOs drew a staggering 2,19,000 applications so far in FY25.
Data from Primedatabase.com also showed higher risks and a minimum commitment of ₹1 lakh failed to deter the number of applicants.
«In a bullish market, investors tend to invest in all IPOs, hoping for allotments in some, due to the high likelihood of listing gains,» said Pranav Haldea, managing director, PRIME Database Group. «The advent of trading apps has streamlined the IPO investment process, reducing it to just 3-4 clicks. Now, the funds remain in the bank account until allotment, making it an attractive option.»
The average gain on listing based on closing price in FY25 is 76%, with the number of applications exceeding 218,000. In four IPOs — Hoac Foods India, Medicamen Organics, Koura Fine Diamond Jewelry, and Maxposure — the retail portion was subscribed more than a thousand times.
Retail interest in SME IPOs surged dramatically starting FY23, driven by significant rallies in some issuances and bumper listing gains. In FY22,
