IPO Watch: IPO of 80 percent government companies caused loss to investors, before LIC these companies gave a blow
IPO (File photo)
Highlights
- IPO of government companies sinks investors’ money
- Only HAL company benefited investors
- Private companies have given the highest returns in IPO
IPO Watch: Investors who put money in LIC’s IPO are in huge loss. However, it is not that LIC is the first government company that has caused losses to investors. Earlier, IPOs of dozens of government companies have drowned investors. According to a report, market investors have lost more than Rs 4,000 crore from IPOs of government companies (CPSEs) during the last 12 years. A total of 23 CPSEs came into the IPO market between 2010 and 2022. Of these, LIC was the largest company. Apart from LIC, Coal India, General Insurance Corporation, New India Assurance, Indian Railway Finance Corporation and Hindustan Aeronautics Limited (HAL) also had IPOs but all except HAL’s shares kept falling.
Only HAL gave benefit to investors
According to the data released by Prime Database, companies like LIC, Coal India and GIC had IPO price of 10000 crore or more while the remaining three NIA, IRFC and HAL had IPO price of 4,000 crore and 10,000 crore. The 17 IPOs that were hit in the rest of the market had their IPO price between Rs 120 to 1500 crores. BSE data shows that only HAL has given better returns to its investors in IPOs of more than 4,000 crores.
Private companies made bumper profits
Many PSUs have disappointed investors, while in the last two years, many private companies have done the work of making investors rich. Experts say that unlike the private, the government cannot run a company just for profit. So most of the public sector undertakings are still struggling. Private sector units are considered efficient as compared to their PSU counterparts. The government has also accepted many times that its role is to govern and not to run business.
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