2022's Multibagger IPOs. How Are They Stacked-up for 2023?

As 2023 begins, lots of companies are planning to come out with their initial public offers (IPOs). The pipeline is so strong that more than 50 companies are waiting on the sidelines, planning to raise close to Rs 840 billion (bn) in 2023.

The interest for IPOs is at its peak at present, all thanks to Mamaearth's founders seeking sky-high valuations for its IPO this year.

Recently, we wrote to you about the worst IPOs of 2022 and the lessons to learn from them. Today, lets take a look at the best performing IPOs of 2022 and the future of those companies.

The star performing IPO of 2022 is...

The FMCG arm of the giant Adani group - Adani Wilmar - made its debut on the bourses on 8 February 2022. The way the company's shares were listed on the bourses, no one would have expected the company to be the best-performing IPO of 2022. That's because shares of the Adani group company were listed at a discount of 4%.

The offer price was Rs 295 and were listed at Rs 221. On 30 December 2022, Adani Wilmar's share price closed at Rs 617.6 registering a multibagger gains of 179% since listing.

Just like all other Adani group stocks, Adani Wilmar too rallied in 2022.

The Russia-Ukraine war led to a global price rise in a lot of commodities including oil. This in turn, helped Adani Wilmar. The company owns India's top edible oil brand, 'Fortune'. It has an 18% market share in the edible oil segment.

As the Russia-Ukraine war situation normalises there is a chance that the company's fortunes may not increase like it did in 2022.

However, the company is a big name under its flagship brand and has the largest distribution network among all the branded edible oil companies in India with a fair market share left to grab.

Hence, it looks like the company may lose a stake in the international market, but it stands a chance to penetrate the domestic market.

Adani Wilmar share price was falling in the last two weeks of 2022, but they soon staged a smart recovery. This after the company said it expects stable prices to spur consumption.

Other top performing IPOs of 2022

After Adani Wilmar, the next best IPO in 2022 was Hariom Pipe Industries. Beginning from its listing at 40% gains to 135% gains during 2022, it was a dream come true for investors who got the shares on allotment.

It listed at Rs 153 and closed 2022 at a price of Rs 359.4.

On 25 November 2022, the company commenced commercial production in its electric melting furnace with a capacity of 15 tonnes . This is expected to increase the company's production of MS Billets from the current 95,832 metric tonnes per annum (MTPA) to 104,232 MTPA.

The company has evolved as a strong integrated steel manufacturer with a stronghold in the south Indian market.

The third most profitable IPO of 2022 was Venus Pipes and Tubes. The company was listed on the bourses at a decent premium of 3%. During 2022 Venus Pipes and Tubes turned out to be a multibagger stock, as its share price rallied 119%.

In 2022 the company become the first Indian company to receive Bureau of Indian Standards (BIS) approval for stainless steel seamless and welded pipes and tubes.

The company, under the brand name Venus, supplies its products for applications in diverse sectors, including chemicals, engineering, fertilisers, pharmaceuticals, power, food processing, paper, and oil and gas.

The company is in a sweet spot right now, thanks to the expansion of product offerings by the pipe maker and favourable government policies.

The imposition of five-year, anti-dumping duty on stainless steel seamless tubes and pipes from China up to 2027 will increase the cost of hollow pipe procured from China.

The next in line was Ruchi Soya Industries (Patanjali Foods). Shares of the company were listed at a premium of 42%. During 2022, Patanjali Foods rallied by 84%.

Patanjali Foods plans on building a strong distribution-led export portfolio of fast-moving consumer goods and fast-moving health goods products and also will launch new products with high margins and high growth. It also intends to focus on digital channels and e-commerce.

It is also working towards strengthening its e-commerce sales across platforms to cater to the B2C (business-to-consumer) segment and has launched an app called 'OrderMe' to cater to changing consumer preferences.

Investment Takeaway

In 2022 the primary markets were dull and dusty. The above five companies managed to give a stellar performance despite the headwinds of the market. This just goes to show that a fundamentally strong company with bright prospects may underperform initially but eventually it will give favourable returns.

To conclude, treat an IPO as anything buy yet another stock that you could consider for long term investment.

There's no reason to compromise on the moat, management quality, and valuations of the company.

Stay tuned to get further updates on this IPO and all upcoming IPOs in the market.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...