2024's most notable IPO flops: Analysing the factors behind major listing day losses

The performance of an IPO (Initial Public Offering) is often judged by how its stock price changes on the first day it starts trading. If the closing price on the listing day is lower than the price it was issued, the IPO is considered an unsuccessful debut.

The first trading day is important for many investors looking to make quick profits by selling their shares immediately. This day also reveals the true demand and value of the stock, as it becomes available to everyone who either couldn't buy the IPO shares initially or didn't receive an allotment.

Several factors can lead to an IPO's poor performance, including problems with the company's fundamentals, management issues, bad timing, incorrect valuation, and lack of proper planning. Therefore, it is important for investors to thoroughly research the company before investing their hard-earned money.

Here we have the top five IPOs failed badly in the year 2024:

Source: SEBI (DRHP), NSE

M.V.K. Agro Food Product Ltd

M.V.K. Agro Food Product Ltd, an SME, listed its IPO on March 7, 2024. The issue size was ₹65.88 crore with a subscription of 8.46 times. The issue price was set at ₹120, but the stock debuted at ₹82.95, marking a significant listing day loss of 30.88%. The current price has further declined to ₹41.85, representing a total loss of 65% from the issue price.

MVK Agro Food Product Ltd. (MAFPL) is an integrated sugar and other allied products manufacturing company operating from Nanded District in the State of Maharashtra. It operates a single-location sugar unit having a licensed crushing capacity of 2,500 TCD. In addition to sugar, the company also commercialize and sells by-products and waste products, namely, Molasses, Bagasse and Pressmud.

JG Chemicals Limited

JG Chemicals Limited, a mainline IPO, went public on March 13, 2024. The company raised ₹251.19 crore with a strong subscription rate of 28.52 times. The issue price was ₹221, and it opened at ₹184.65, resulting in a listing day loss of 16.45%. However, the stock has since recovered, with the current price standing at ₹238.3, reflecting an overall gain of 8%.

JG Chemicals Ltd. (JGCL) is India's largest zinc oxide manufacturer in terms of production and revenue for zinc oxide manufacturing through the French process, which is the dominant production technology for producing zinc oxide and has been adopted by all the major producers in the Americas, Europe and Asia.

Italian Edibles Limited

Italian Edibles Limited, also an SME, launched its IPO on February 12, 2024. The issue size was ₹26.66 crore, and it saw an overwhelming subscription of 154.43 times. The issue price was ₹68, but the listing price fell to ₹57.75, a loss of 15.07% on the first day. The current price has dropped further to ₹33.35, indicating a total loss of 51% from the issue price.

Italian Edibles Ltd. (IEL) is a manufacturer and supplier of Confectionery products. It in a broader sense implies the preservation of sweet delicacy preparation in the form of candies, caramels, chocolate, processed cocoa and milk and traditional Indian confections. The company has been manufacturing mouthwatering confectionery products for the last 14 years.

3C IT Solutions & Telecoms (India) Limited

3C IT Solutions & Telecoms (India) Limited, an SME, listed its shares on June 12, 2024. The IPO size was ₹11.44 crore with a subscription rate of 20.21 times. The issue price was ₹52, and it opened at ₹45.16, showing a listing day loss of 13.15%. The stock price has slightly recovered to ₹47.41, resulting in a current loss of 9% from the issue price.

3C IT Solutions & Telecoms (India) Ltd. (3C IT) is an established IT systems integration company operating for the past 8 years as claimed by the company. IT System integration, as the name suggests, combines all the company's IT systems (technology, applications, and software) into one system common to all of them. Integration of IT systems is a comprehensive service that includes identifying the client's business needs, designing solutions, and implementing them in a company.

Jana Small Finance Bank Limited

Jana Small Finance Bank Limited's mainline IPO was listed on February 14, 2024. The issue size was ₹570.00 crore with a subscription rate of 19.89 times. The issue price was ₹414, and the stock debuted at ₹368.2, a loss of 11.06% on the first day. However, the stock has surged since then, with the current price at ₹714.25, reflecting a significant gain of 73%.

Jana Small Finance Bank (JSFB) is the fourth largest Small Finance Bank in terms of AUM and the fourth largest Small Finance Bank in terms of deposit size as of September 30, 2023. As of September 30, 2023, it had 771 banking outlets, including 278 banking outlets in unbanked rural centers, in 22 states and two union territories.

These IPOs illustrate varying performances, with some experiencing substantial losses post-listing, while others managed to recover and achieve gains.

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