A Performance Analysis of Indian Small and Medium Enterprise (SME) IPOs: A Sectoral Study of 2021 Listings
Author : Mohini Attimani
Abstract :
A brief performance analysis of 56 Small and Medium Enterprise (SME) IPOs listed on Indian exchanges during 2021 is presented in this paper. Evaluation of post-listing returns, performance trends, and the sectoral classification of companies plays an important role in determining investment outcomes.
According to the report, extreme performance dispersion characterizes the market. A few outlier multi-baggers significantly distort the aggregate simple average return of +288.73%, making it extremely deceptive. The "typical" investment experience is better represented by the median return of +78.35%, which shows that although the median result was positive, it was far more modest. The data shows a substantial discrepancy between long-term value development and short-term "listing pops" (average +14.70%).
The most important distinction was found in sectoral analysis. With strong median returns of +600.40% and +133.82%, respectively, the Logistics & Supply Chain and Industrial Manufacturing & Infrastructure sectors clearly outperformed the others. As seen by the sharp disparity between their high averages and low medians, the IT/ITeS and healthcare sectors, on the other hand, were strongly polarized and offered both the possibility of enormous returns and a high likelihood of significant capital destruction. The only group that consistently destroyed value was the Miscellaneous & Business Services sector, which had a negative median return (-63.87%).
The study comes to the conclusion that although the Indian SME IPO market of 2021 offered significant prospects for wealth creation, it was a high-risk environment where sector selection was crucial to success. By focusing on logistics and industrials and being extremely cautious with technology, healthcare, and other services, investors may have greatly increased their chances of success. When assessing highly skewed, high-risk asset classes, these results highlight the significance of basic sector research and the preference for reliable statistical metrics like the median over crude averages.
Keywords :
Wealth creation, volatility, risk-return profile, value destruction, investment strategy.
