IPO Crash: Three recent listings that are already down up to 40% from issue price

The last 13 trading sessions on Dalal Street have seen more than 20 listings take place. Two-thirds of those are currently below their issue price, but three stand out in particular.

Shares of Om Freight Forwarders made their stock market debut on Wednesday, October 9. The stock listed at a discount in comparison to its issue price of ₹135 per share. A discount of over 30%. The first trading day for the stock ended with losses of 36%.

The ₹122 crore IPO of the company saw overall subscription of nearly 4x the total number of shares on offer. The retail portion was also subscribed more than 2x.

Om Freight Forwarders' listing happened just a day after Glottis Ltd. listed on the exchanges with a similar discount in comparison to its issue price of ₹129 per share. The stock ended its trading debut 35% lower than its IPO price. A brief rebound took place on Wednesday, but that was swiftly sold into, with the stock ending at the flat line.

The Glottis IPO was subscribed 2.05 times the shares on offer, with the retail investor portion seeing subscription of 1.42x.

There has been a rush of companies intending to go public with as many as 50 IPOs opening for subscription on Dalal Street during the July-September period itself.

Shares of BMW Ventures Ltd. listed on the exchanges last week with an IPO price of ₹99. The stock ended its trading debut at a discount of 25% to its issue price. In the four trading sessions since, the stock has ended in or close to a 5% lower circuit. As of Wednesday's close, the stock was down 40% from its issue price.

The BMW Ventures IPO had managed to see a subscription of 1.5 times the total issue size, but the retail investor portion was not fully subscribed.

"Now there is a class of retail investors, which follow the quick money addiction habit. They all believe that ₹10 rupee NAV, ₹10 rupee NFO, is a good thing to own. Similarly, they have misconception that IPO will always list at a premium and you will make money. Both this myths are wrong, but many a times, people, instead of learning from other people's experience, learn by committing mistake," Nilesh Shah of Kotak Mahindra AMC had told CNBC-TV18 on October 1.

"I believe people will become more and more selective on IPO. They will look at valuation. You don't have to worry about business because SEBI is having a very good gate keeping, but valuation is something which investor will have to decide on their own. I think as the reality bites in as the myth that 'in IPO, you always make money' breaks, my feeling is that investors will become more rational," he added.