Retail buyers dump LIC, Nykaa, others

MUMBAI : A clutch of companies that eroded billions in shareholder wealth since their public listing has seen an exodus of retail shareholders, a Mint analysis of exchange data showed. At least 2.2 million retail shareholders, 73 large foreign institutional investors, and 22 mutual funds sold shares of 12 large companies, including Nykaa, Life Insurance Corporation of India and Paytm, since their initial public offerings. “While the erosion in investor wealth somewhat indicates unfair IPO pricing, with their money stuck in such large listings, millions of public investors, especially retail, are now desperately waiting to exit and put in money in fresh IPOs as primary markets seem to be reviving," said the head of equity capital markets in India at a large US-based banking and financial services firm. Out of the 441 firms, 316 companies—mostly small and mid-cap—together have made gains worth ₹5.11 trillion in market value since their IPOs; however, at least 125 companies, mostly large-caps, caused a loss of ₹5.81 trillion for their IPO investors so far, forcing hundreds of thousands of disgruntled public investors to either exit at steep losses or await indefinitely for their IPO investments to turn a profit. Companies that saw the largest erosion in investor wealth since IPO include Nykaa, LIC, Paytm, EaseMyTrip, Star Health and PolicyBazaar.