List Of Failed IPOs In India: IPOs are one of the most interesting events in the markets. The entire circle of investors and traders get to witness a company debut in the market for the first time, and every one of them could become the next blue chip giant, just waiting to become one with Nifty or Sensex. They’d like to, but the chances of that happening are marginal at best. 

On the flip side, it could go the other way and send the stock price, and your investment, into freefall. Investing in an IPO is risky and rewardful, but it’s hard to say because there is no public history about the company, excluding its DRHP filing with SEBI. A good IPO will have 1 or more multiples in subscription, good market hype for the stock, and a decent gray market price. 

The Importance Of IPOs

An IPO’s success is essential to the company’s promoters and stakeholders. Usually, promoters of a company have a major portion of their net worth tied to the company. An IPO transitions the company from a private company to a public one, allowing the promoters to trim some of their stakes to raise capital. 

To the other stakeholders, the IPO is an opportunity to exit their investments and make some returns. This is especially true for VC-backed startups, which are funded from the seed stage. These investors can exit their investments once the company’s shares are traded publicly. 

Then, there’s the obvious importance that public investors get to invest in the company for the first time. Also, for the first time, traders get to buy and sell the shares daily for intraday trading. 

When Is An IPO A Failure?

An IPO has failed when the company doesn’t get its share price and valuation to a certain number, either because the investors aren’t interested, or because the economy isn’t in its favor. Here are some of the infamous IPOs that failed in India. 

List Of Failed IPOs In India

From Reliance Power to Delhivery, here is a list of failed IPOs in India –

1. Reliance Power

Reliance Power is the oldest IPO on this list, but it was so infamous, that people still refer to it as one of the worst IPOs in India. Listed in 2008, Reliance Power was a company under Anil Ambani’s stake in the Reliance group.

The company’s share price has tanked by -95.6 percent since listing, currently trading at ₹10.3 per share. For reference, it was listed at ₹240.3 per share, back in the year 2008.

The Reliance Power IPO was one of the biggest in the Indian markets, and also one of the biggest flops as well. The tag of “Ambani” and “Reliance”, both names to be reckoned with, couldn’t stop the plunge of one of the biggest failed IPOs in India. 

2. Zomato

When food delivery was still a growing industry, only a handful of startups were involved in making it into a billion-dollar industry. Zomato was and still is an industry leader in the food delivery platform, employing lakhs of gig workers throughout India. 

Despite its growth and market presence, the IPO wasn’t a good idea for the company. Zomato went public in July 2021, during the bull market of the Indian markets. For a short period, the shares of Zomato rose after the IPO to ₹154.70 per share.

But since then, the shares have fallen, going as low as ₹46.8 per share. Zomato has been majorly a loss-making company, and the stock has fallen by 58 percent, shedding over half of its IPO valuation. 

3. Paytm (One97 Communications)

When PM Modi demonetized the ₹500 and ₹1,000 rupee notes in 2016, it sent shockwaves felt by the entire country. There were long queues of people waiting at ATMs, just so that they could withdraw cash for everyday essentials and bills.

Quietly and effectively, a few disruptors in the fintech space used this as an opportunity, and this sped the UPI revolution in India. One of those disruptors was Paytm. During the bull run of 2021, Paytm went public in November, making it one of the biggest IPOs in India’s history.

The price band for the IPO was ₹2080 to ₹2150 per share, from a total issue size of ₹18,300 crores. Not only did the company list at a discount, but it never reached the IPO price of its shares. Since listing, it is down by 59 percent, making it one of the worst IPOs in India.

4. LIC (India)

Life Insurance Corporation of India took a bold step in going public in mid-2022. It was the biggest public issue in India, with a size of ₹21,000 crores. The company had a rich history in India, and is the biggest asset manager and institutional investor.

Initially, the Government Of India planned to sell 5 percent of its stake for a higher valuation but backed out of the plan. Even then, it became the biggest IPO in India’s history. Despite efforts from various entities involved in the IPO, nothing could stop the fall in the share price of the insurance giant.

On a percentage scale, the fall of LIC’s shares seems lower at 34.04 percent. But when you consider the size of the company, 34.04 percent is a heavy number. Especially for a 3.4 lakh crore market cap company. 

5. CarTrade

Another IPO that came out in 2021, Car Trade was believed to be a successful IPO given the subscription multiple of 20.2 times. The company is a marketplace for used cars in India, an industry that is parallel in size and importance to the new vehicle market. 

You would assume that would be a sign of optimism for a company that’s going public. But that wasn’t the case and since listing, Car Trade has shed about 72 percent of its value, severely dropping the value of the company. 

It’s currently trading at ₹408.5 per share, down from its listing price of ₹1,501.05 per share. 

6. PB Fintech

If you’ve ever found yourself needing insurance for your bike, your car, your family, or just insurance in general, you might have come across the platform Policy Bazaar. PB Fintech is the parent company of online insurance provider Policy Bazaar. 

Besides providing insurance, they also provide financial services like home loans, personal loans, credit cards, and mutual funds through Paisabazaar. Like many companies on our list, PB Fintech went public in 2021, during the bull run.

Its shares were listed at ₹1,332 per share in November 2021. Unfortunately, the company’s stock never rose or maintained its listing price since then. It has fallen by 53.17 percent since then, currently trading at ₹624 per share.

A brief look at the financial reports of the company shows that PB Fintech hasn’t been profitable in over seven years (Since 2015). 

7. Delhivery

At number 7 on our list of failed IPOs in India is the logistics company Delhivery. On the company’s website, it claims to be India’s largest fully integrated logistics provider. Of all the companies that went public in our list, Delhivery is one of the more recent IPOs.

The company’s shares were listed in the Indian markets in May 2022 at a price of ₹541.5 per share. For a short while, the share rallied, going up to ₹668.6 per share in July. The rise was short-lived, and the company’s shares haven’t reached that price since listing.

It has almost halved from its peak to ₹327.9 per share. The company’s annual reports show that it hasn’t been profitable since 2016, and the losses have been rising since March 2020.

Other IPOs That Have Failed In India

The IPOs mentioned above are some of the most infamous stocks that have fallen substantially since listing. While the reasons vary from consecutive losses, overvaluation, or bad timing, one thing we can say for certain is that they have lost investor wealth. Here are some other companies whose IPO didn’t perform as well as investors expected. 

  • Inox Green Energy
  • Uma Exports
  • Keystone Realtors
  • Kalyan Jewellers
  • FINO Payments Bank

Also Read: How IPO Listing Price Is Decided? – Meaning, Components & More!

In Closing

IPOs are interesting and one of the best investment opportunities in the market. Investors get to own the stock before the rest of the market, and it could be an exciting ordeal. Veteran investors know that not all IPOs are good, and have to be careful when investing.

The banks involved in the IPO have a responsibility to market the IPO on behalf of the company, and they have financial incentives to do so. This cannot translate to transparency as they are motivated by their gains, over promoting an IPO that may or may not be beneficial to the investor. 

This is why every experienced investor will tell you – Do Your Own Research! With that, we’ve reached the end of our blog piece on the List Of Failed IPOs in India. Happy Investing!

Tags: List Of Failed IPOs In India, Which is the top fail IPO in India?, How many IPO companies fail?, Why IPO fails in India?, What are the top 5 IPOs in India?, Which Top company’s IPOs have failed?, Which is the best IPO?, Failed IPO examples, IPO failures 2022, Why Paytm IPO failed, Successful IPO in India, What happens when IPO fails, Worst IPO in India 2022, Why do IPOs fail in India