Initial Public Offerings (IPOs) tend to stir up excitement in the stock market, often becoming the talk of the town. But not all IPOs hit the ground running. Some struggle right out of the gate, facing lukewarm investor interest, lacklustre demand, and disappointing listing-day performances. Yet, a handful of these so-called “misunderstood IPOs” defy early expectations, turning into multibagger stocks over time. In this article we examine such IPOs, tracing their journey from unremarkable debuts to surprising success stories. It also sheds light on the key lessons investors can learn from these remarkable turnarounds.
Table of Contents
Garden Reach Shipbuilders & Engineers (GRSE)
Garden Reach Shipbuilders & Engineers (GRSE) calls Kolkata, West Bengal, its home and operates in the defence and aerospace sectors. It’s a specialist in building warships, patrol vessels, and other defence hardware. The company’s long-standing association with the Indian Navy and Coast Guard has kept its order book healthy. GRSE’s engineering capabilities and reputation for timely delivery have solidified its standing in the industry. The company’s expertise extends beyond defence, with a focus on modernization and expansion, enabling it to adapt to evolving demands in the defence and maritime sectors.
IPO Details:
- Open Date: 24 September 2018
- Close Date: 01 October 2018
- Listing Date: 10 October 2018
- Issue Price: INR 118
- Listing Price: INR 103.30 (-12.46%)
- Issue Size: INR 343.59 crore
Performance:
GRSE didn’t exactly make waves when it listed. The stock dropped 12.46% below its issue price, leaving investors sceptical. But those who stuck around were in for a surprise. Within a year, the stock had climbed 45.25%. Fast forward to today, and it’s trading at INR 1,655.05—a jaw-dropping 1,302.58% return. Factors like increased government spending on defence, operational improvements, and repeat orders helped the company win back investor confidence and propel its growth. GRSE has also benefited from a broader push for indigenization in defence production, which further boosted investor sentiment and positioned it for sustainable growth.
Hindustan Aeronautics (HAL): Government-Backed Misunderstood Multibagger IPO
Bengaluru-based Hindustan Aeronautics (HAL) is a name synonymous with defence and aerospace innovation. The company manufactures aircraft, helicopters, and defence systems, playing a vital role in India’s defence infrastructure. With products ranging from fighter jets to avionics, HAL’s collaborations with global players have kept it competitive and technologically advanced. The company is also focused on research and development, continuously enhancing its product portfolio and addressing the future needs of India’s defence forces.
IPO Details:
- Open Date: 16 March 2018
- Close Date: 20 March 2018
- Listing Date: 28 March 2018
- Issue Price: INR 1,240
- Listing Price: INR 1,132.85 (-8.64%)
- Issue Size: INR 4,113.13 crore
Performance:
HAL’s IPO launch didn’t exactly set the stage on fire. Listing at an 8.64% discount, it went on to slide 40.35% within a year. But the narrative flipped. Today, the stock is valued at INR 4,172.75—an impressive 573.02% gain. With rising demand for Indigenous defence equipment and strong government backing, HAL has soared to new heights, rewarding those who stayed the course. Its focus on modernization, along with strong export opportunities, has positioned HAL as a crucial player in the global defence industry.
MSTC – Recycling Player in Misunderstood IPOs
MSTC, headquartered in Kolkata, operates in the trading and services sector. It’s a key player in e-commerce and recycling, offering sustainable solutions through digital platforms. MSTC has carved out a niche in e-auctioning and trading scrap materials, making the process smoother and more transparent. With a growing emphasis on sustainability and digital transformation, MSTC has leveraged its expertise to emerge as a leader in environmentally friendly recycling initiatives.
IPO Details:
- Open Date: 13 March 2019
- Close Date: 20 March 2019
- Listing Date: 29 March 2019
- Issue Price: INR 120
- Listing Price: INR 113.95 (-5.04%)
- Issue Size: INR 211 crore
Performance:
MSTC shares slipped 5.04% on listing day and kept falling, losing 36.54% in its first year. But the tide turned. Currently trading at INR 680.60, the stock has clocked a 467.17% return. Thanks to the rising demand for sustainable practices and digital trading platforms, MSTC found its groove.
Read Also: Debt-Free Penny Stocks: Unveiling Hidden Gems in the Market
Macrotech Developers (Lodha)
Macrotech Developers, also known as Lodha, is a Mumbai-based real estate company involved in residential and commercial property development. It has established a strong presence in India’s booming real estate market. The company focuses on luxury and mid-income housing projects, leveraging its reputation for quality construction and timely delivery. Macrotech has expanded its footprint beyond Mumbai, targeting high-growth urban centres and suburban regions to capitalize on rising urbanization trends.
The company has diversified its offerings, including affordable housing and sustainable townships, appealing to a broader segment of buyers. Lodha’s emphasis on customer satisfaction, innovative design, and sustainability has positioned it as a leader in the real estate sector. It has also established partnerships with international firms, enhancing its capabilities and credibility in premium property development.
IPO Details:
- Open Date: 07 April 2021
- Close Date: 09 April 2021
- Listing Date: 19 April 2021
- Issue Price: INR 486
- Listing Price: INR 465.26 (-4.27%)
- Issue Size: INR 2,500 crore
Performance: Despite a lacklustre start, Macrotech Developers made an impressive comeback. After a year, it gained 125.06%, and its current price of INR 1,365.00 reflects a 461.73% increase. Its performance has been driven by strong demand in the housing market and strategic expansions into new regions and affordable housing segments. Lodha’s strategic focus on developing large-scale integrated townships and affordable housing projects has resonated well with buyers, contributing to robust sales growth.
Additionally, the company has benefited from favourable government policies, such as the Pradhan Mantri Awas Yojana (PMAY) and infrastructure upgrades, further boosting real estate demand.
Read Also: Multibagger Penny Stocks In India
Bharat Dynamics Ltd. (BDL)
Bharat Dynamics, headquartered in Hyderabad, Telangana, operates in the aerospace and defence sector. It is involved in the production of guided missiles and defence equipment. The company has a rich legacy as a defence public sector enterprise and is one of the leading manufacturers of missile systems in India.
IPO Details:
- Open Date: 13 March 2018
- Close Date: 15 March 2018
- Listing Date: 23 March 2018
- Issue Price: INR 428
- Listing Price: INR 389.80 (-8.93%)
- Issue Size: INR 960.94 crore
Performance: BDL had a challenging start, losing 33.01% in its first year. However, the stock made a strong recovery, currently trading at INR 1,131.90, reflecting a 428.93% gain. Its growth has been supported by increasing defense budgets and export opportunities.
Read Also: Top Startups in EV Ecosystem In India
Final Thoughts: Lessons from Misunderstood IPOs
The examples above highlight that a weak debut doesn’t seal a stock’s fate. For investors willing to look past listing-day blues, misunderstood IPOs often offer hidden opportunities. The key lies in focusing on fundamentals, spotting undervalued stocks, and having the patience to let growth unfold.
Tips for Investors:
- Focus on Business Fundamentals: Look beyond the hype and analyze the company’s long-term prospects.
- Play the Long Game: Stocks often need time to prove their worth. Be patient.
- Seek Hidden Gems: Underappreciated IPOs can turn into market leaders with time.
- Monitor Sector Trends: Understanding broader industry shifts can help predict long-term winners.
- Reevaluate Regularly: Track company performance and adjust positions as needed.
With research, patience, and a sharp eye for potential, even the most misunderstood IPOs can deliver multibagger returns. Remember, the market often rewards those who dare to look past the initial chaos and focus on long-term fundamentals.
