Indian equity markets show high returns for low-PE IPOs and mid-cap stocks

Recent market data highlights significant returns for investors in the Indian equity market, specifically through low-valuation IPOs and long-term holdings in specific mid-cap stocks.

Between January and August, 12 IPOs with price-to-earnings (PE) ratios below 20x delivered an average return of 45.4% as of September 29. These issues, which primarily raised capital through new share issuances rather than offering for sale (OFS), outperformed the broader group of all IPOs, which averaged a 33% return. In contrast, high-valuation IPOs with PE ratios between 30x and 50x saw most of their gains at listing, followed by a more modest 10.5% increase.

In the mid-cap sector, Welspun Corp Ltd has demonstrated exceptional growth. Over a five-year period, the stock rose from approximately ₹143 to over ₹2,600, representing a return of more than 1,700%. The company, a major part of the Welspun World group and a global leader in line pipe manufacturing, has seen its share price increase by 199% in the last six months.