Stock Market Updates May 2022

Trends in Secondary Markets:

BSE Sensex was bearish and closed at 55,566 points in May 2022 down by 2.62%. Nifty 50 closed at 16,585 that is 3.03% correction in the month of May. The correction was on account of raising of interest rates by RBI, inflation concerns and global outlook.

Foreign Institutional Investors (FIIs) divested Rs. 54,292 Crore (Net Sales) while Domestic Institutional Investors (DIIs) invested Rs. 50,835 Crore (Net purchases) from the Indian equity markets in the month of May 2022.

• All BSE Indices were in red in the month of May, except Auto and FMCG.
• Shares of Oil marketing companies, Indian Oil, Bharat Petroleum Corporation and Hindustan Petroleum were down due to rising crude oil prices which hurt their refining margins.

Primary market Update:

There were eight main board IPOs in May, of Campus Activewear Limited, Rainbow Children’s Medicare Limited, Life Insurance Corporation of India (LIC), Prudent Corporate Advisory Services Limited, Delhivery Limited, Venus Pipes & Tubes Limited, Paradeep Phosphates Limited and Ethos Limited as against three IPOs in April 2022. There were four SME IPOs in May as against three SME IPOs in April 2022.

From 8 IPOs that came out in May, which were all fully subscribed by the investors, 5 of the IPOs have given negative returns till date with 4 of the IPOs listed at discount on listing day. The much discussed mega IPO of LIC, which is country’s largest IPO till date and which got subscribed 3 times due to heavy demand, also tanked and listed at 9% discount on listing day with prices going down substantially post listing.

While underwhelming performance of IPOs in 2022 can be attributed to general weakness in stock markets, it also stresses the point that there are both good quality and poor quality IPOs and retail Investors could avoid applying to every IPO just for easy listing day gains.

Acknowledgements: 

RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)

Disclaimer:

This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.

This material captures the information based on information available in the public domain, public announcements and sources believed to be reliable. Analysis contained herein is based on publicly available information and appropriate assumptions. This material is intended merely to highlight market developments and is not intended to be comprehensive and does not constitute strategic, investment, legal or tax advice. In no event Vora Management Consultancy Private Limited be liable for any use by any party or for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you for evaluating any transaction. 

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