IPO Revival Sans Retail Frenzy

After lying somnolent in 2008 and displaying some signs of life in 2009, the primary market has come into its own in 2010. Till October 2010, 55 initial public offers (IPOs) have this year cumulatively raised Rs 36,772 crore. This is almost 9 per cent more than the amount raised in 2007, which was supposedly one of the best years for IPOs: 103 new issues hit the market and raised close to Rs 33,782 crore, and that too without a blockbuster IPO like Reliance Power or Coal India. But while companies may have successfully raised a lot of money from the primary market, has this revival of IPOs helped retail investors make money? If one looks at the performance of new issues, one finds that of the 34 issues that have been trading for more than a month, the average one-month return is 8.35 per cent. Around 44 per cent of these newly-listed stocks are trading below their listing price. Compare this with the returns offered by the secondary market. Till date (October 28, 2010) this year the Nifty has given a return of 15.12 per cent. Only during January and May did the mar