Here’s how 2024's top IPOs delivered big returns for shareholders

As we approach the end of 2024, it is crucial to look back at how some of the top IPOs of the year have performed. The IPO market this year has delivered exciting returns, showcasing strong investor confidence in various sectors.

We will focus on companies delivering the highest returns since their IPO listing, as it makes sense to analyse those that have performed well beyond their listing day—indicating either strong fundamentals or market optimism about their future growth. Let’s analyse the performance of the top 5 IPOs of 2024 and understand what made them stand out.

Here are the top 5 IPOs of 2024

Jyoti CNC Automation Limited

In the latest quarter (September 2024), the company reported a revenue of ₹431 crore, reflecting a 42% YoY growth, while net profit grew by an impressive 4.4 times YoY. The shareholding pattern saw significant changes, with DIIs increasing their stake from 6.54% in June 2024 to 10.99% in September 2024. FIIs also raised their holding from 4.91% in June 2024 to 5.81% in September 2024.

The company’s debtor days have improved significantly, from 149 days (March 2021) to 68 days (March 2024). With a strong ROCE of 21%, the stock’s listing day gain was 30.86%.

Shareholders who invested in the IPO are now sitting on a remarkable return of 281%. Despite these impressive returns, the stock’s PE ratio stands at 105, compared to the industry PE of 44, indicating market optimism about its future growth.

KRN Heat Exchanger and Refrigeration Limited

In Q2FY25, the company reported a 28% YoY sales growth at ₹91 crore, although there was a 5.2% QoQ decline. Net profit increased from ₹9 crore in Q2FY24 to ₹12 crore in Q2FY25. The stock’s listing day gain was a staggering 117%, while IPO shareholders are currently enjoying a return of 263%.

The shareholding pattern remained stable with no significant changes. Operating profit margins (OPM) have been steady, ranging between 18% and 20%. The company has a strong cash balance of ₹350 crore, and a major portion of liabilities comprises leases. The stock is trading at a PE ratio of 125, compared to the industry average of 46, reflecting high growth expectations.

Premier Energies Limited

The company’s financial growth has been phenomenal. Sales grew by 171% YoY in the June quarter and 120% YoY in the September quarter. On the listing day, the stock delivered an 86% gain, and current IPO shareholders have seen a robust return of 190%.

The promoter holds 64% of the company’s shares, while FIIs and DIIs together hold 9.7%. Public shareholding makes up the rest. From FY20, the company has increased its investment in plant and machinery by over 4.5 times, from ₹211 crore to ₹1,004 crore.

Cash balances stood at an impressive ₹1,853 crore. Trading at a PE of 251 (industry PE: 64), Premier Energies is clearly commanding a premium valuation. Its ROCE and ROE are 25.2% and 43.7%, respectively, showcasing strong operational efficiency.

Platinum Industries Limited

Platinum Industries Limited manufactures PVC stabilisers, CPVC additives, and lubricants. On the listing day, the stock delivered a 33% gain, and current IPO shareholders have seen a robust return of 184%.

The company’s revenue has grown over 50% YoY in the last two quarters. However, its operating profit margins remain volatile, ranging between 9% and 23%. Cash conversion days have improved significantly, from 84 days (2023) to 59 days (2024).

Promoters hold 71% of the company’s shares, with the public holding 25%. FIIs have been reducing their stake from 5.09% in March 2024 to 0.72% in September 2024, while DIIs increased their holding from 2.69% to 3.04% over the same period.

With a PE ratio of 51 (industry PE: 36), the company’s valuation reflects growth expectations. Its ROCE and ROE are impressive at 27% and 22%, respectively.

Bharti Hexacom Limited

In Q2FY25, the company reported a 21% YoY growth in sales, reaching ₹2,098 crore. Operating margins have expanded significantly, from 23% (March 2021) to 47% (March 2024). The stock’s listing day gain was 42%, and IPO shareholders are currently enjoying a 150% profit.

Promoters hold 70% of the company’s shares, while FIIs and DIIs together hold about 14%. The stock’s PE ratio is 75, compared to the industry average of 57. The ROCE and ROE stand at 14%, reflecting stable profitability.

Conclusion

The IPOs of 2024 have delivered remarkable returns, with investors benefiting from high growth across various sectors. Companies like Jyoti CNC Automation and KRN Heat Exchanger have showcased strong fundamentals, while Premier Energies and Bharti Hexacom have leveraged industry trends to achieve significant growth.

However, the high valuations of these companies also reflect market optimism, which may warrant caution for future investors. As 2024 wraps up, these IPOs stand as a testament to the resilience and growth potential of India’s equity markets.