Alpex Solar IPO Lists 186.09% higher, hits upper circuit

Bumper listing for Alpex Solar IPO, then upper circuit

Alpex Solar IPO had a real bumper listing on 15th February 2024, listing at a premium of 200%. After a strong  opening, the stock closed the day at the 5% upper circuit over the listing price. For the day, the stock closed comfortably and decisively above the IPO issue price and the IPO listing price at the close of trading on 15th February 2024. What also stood out about the stock was the bumper listing on a day when the markets were relatively volatile. It is a different matter that the indices eventually closed higher for the day, but the volatility was quite sharp. In fact, on the day, the Nifty closed 71 points higher while the Sensex had closed 228 points higher for the day. In the last few days, the Nifty has been volatile but has gradually managed to edge higher and on 15th February 2024, the Nifty closed above the 21,900 mark while the Sensex closed above the 72,000 mark.

What stands out about the market in recent weeks is the sharp rise in volatility. The VIX ratio which used to be around 11-12 for a better part of the last few months, is now in the region of 15-16. To an extent, this volatility is due to the upcoming elections and like in the past, this volatility is likely to continue till the elections are over and the new government is formed. For the month, the macros have been positive as the inflation came down sharply and the IIP figure was also higher compared to the previous month.

Subscription and price performance of Alpex Solar IPO on listing day

Let us now turn to the subscription story of Alpex Solar IPO. With robust subscription of 351.89X for the retail portion, 141.48X for the QIB portion, and 502.31X for the HNI / NII portion; the overall subscription was extremely healthy at 324.03X. The IPO was a book building IPO issue with the IPO price band set in the range of ₹109 to ₹115  per share. Being a book built issue and getting such solid subscription numbers, the stock obviously ended up being priced at the upper end of the price band. The stock listed at a strong premium of 186.09% on the NSE SME segment.

However, subsequently, despite the stock seeing some volatility in the early parts of the day, it went on to close at the upper circuit of 5% over the listing price. This was reflective of strength in the stock amidst the volatile market sentiments. The subscription normally impacts the price discovery in book building issues and the listing price. The strong subscription had a positive impact on the ability of the stock  in 3 ways. Firstly, it ensured that the price discovery of the book built issuer happened at the upper end of the price band. Secondly, it led to the stock price listing at a robust premium of 186.09% to the issue price. Thirdly, despite the pressure on the overall market, the stock managed to close at the 5% upper circuit for the day, which is a sign of inherent strength in the stock. Overall, the stock closed the day on 15th February 2024; a full 200.39% above the IPO issue price.

Alpex Solar Ltd closes Day-1 at upper circuit, after a bumper listing

Here is the pre-open price discovery for the Alpex Solar IPO on the NSE.

Data Source: NSE

The SME IPO of Alpex Solar Ltd was a book built IPO and priced at ₹115 per share; which is the upper end of the price band of the IPO. On 15th February 2024, the stock of Alpex Solar Ltd listed on the NSE at a price of ₹329 per share, a premium of 186.09% over the IPO issue price of ₹115. However, despite a volatile day post listing on 15th February 2024, the stock of Alpex Solar Ltd closed exactly at the upper circuit price of ₹345.45 per share on the NSE SME segment. The stock had an upper circuit limit of ₹345.45 for the day and a lower circuit limit of ₹312.55 per share for the day. In the midst of the volatility in trading during the day, the stock hit the upper circuit but stayed put at the upper circuit price for the better part of the day.

However, the stock never went below the listing price of the day, which was also the low price of the day at ₹329 per share. The stock was, obviously, quite far away from the lower circuit price of the day. The stock showed a smart bounce from listing levels as it spent better part of the day locked in upper circuit only. The closing price reflects a strong day of trading, because it closed at the upper circuit and never went below the listing price, and it remained well above the lower circuit limit for the day. Also, the upper circuit comes on top of a 186.09% premium listing of the stock, is all the more appreciable on the day of listing of Alpex Solar Ltd due to the markets being volatile overall. Eventually, the stock closed with gains of 200.39% over the IPO issue price. The Nifty gained 71 points while Sensex was up 228 points on the day. Overall, the closing price of the stock of Alpex Solar Ltd was a full 200.39% above the issue price at the close of the day of stock listing on NSE SME segment.

Listed in the ST segment for trade in T2T

Being an SME IPO on the NSE, the stock of Alpex Solar Ltd was subjected to 5% circuit filter on listing day and was also in the ST (trade to trade) segment. That means, only delivery trades are permitted on the stock. Like the upper circuit price, even the lower circuit price on listing day is calculated on the listing price and not on the IPO price. The opening price of the day was exactly at the low price of the day, meaning the stock never really dipped below the listing price and spent most part of the day at the upper circuit, locked in.

During the day, the stock hit the upper circuit but stayed well above the lower circuit as the listing price of ₹329 per share turned out to be the low price of the day. In fact, the stock rallied rapidly post listing and spent most of the trading day locked at the upper circuit price of ₹345.45 per share. On the NSE, the stock of Alpex Solar Ltd has been admitted to trade in the ST category. The ST category is specifically for the SME Emerge segment of the NSE with compulsory trade to trade settlement. On such stocks, netting of positions is not permitted and every trade has to be settled by delivery only.

How prices traversed for Alpex Solar IPO on listing day

On Day-1 of listing i.e., on 15th February 2024, Alpex Solar Ltd touched a high of ₹345.45 per share on the NSE and a low of ₹329 per share. The high price of the day was exactly the upper circuit limit price of the stock while the stock low price of the day was exactly at the listing price of the day. Between these two extreme prices, the stock was relatively less volatile and eventually closed at the upper circuit price of the day. In fact, the stock can be said to have enjoyed a strong listing on a day when the Nifty and the Sensex closed in the positive, but were subject to huge bouts of volatility in the day. The stock of Alpex Solar Ltd closed at 5% upper circuit on top of a premium listing on the NSE.

During the trading day, the stock never really went below the listing price of ₹329 per share, which was the low price of the day and stayed well clear of the lower circuit price of ₹312.55 per share. The stock quickly bounced and got locked into the upper circuit price of the day. In terms of the circuit filter limits, the stock of Alpex Solar Ltd had an upper circuit filter limit of ₹345.45 and a lower circuit band limit of ₹312.550. The stock closed the day 200.39% above the IPO issue price of ₹115 per share and it also closed 5% above the listing price of the day at ₹329 per share. During the day, the stock of Alpex Solar Ltd hit the upper circuit and stayed locked in the upper circuit for most part of the day. However, it never really dipped below the listing price and so, obviously stayed well clear of the lower circuit price of the day. The stock closed strong at the upper circuit with unmet buy quantity of 75,600 shares and no sellers in the counter. For the SME IPOs, it may be recollected, that 5% is the upper limit and also the lower circuit on the listing price on the day of listing.

Robust volumes for Alpex Solar IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Alpex Solar Ltd stock traded a total of 28.644 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹9,636.13 lakhs on the first day. The order book during the day showed a lot of buying with the buy orders consistently exceeding the sell orders at any point of time. That also led the stock to close with pending buy orders at the end of the trading session, although the price was hardly volatile during the day. It must be noted here that Alpex Solar Ltd is in the trade to trade (T2T) segment so only delivery trades are possible on the stock. Hence the entire volume for the day purely represents the delivery volumes.

At the close of Day-1 of listing, Alpex Solar Ltd had a market capitalization of ₹845.43 crore with free-float market cap of ₹264.11 crore. It has a total of 244.734 lakh shares as the issued capital of the company with a face value of ₹10 per share. As stated earlier, since the trading is on the T2T segment, the entire volume of 28.644 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market. The stock trades on the NSE SME segment under the trading code (ALPEXSOLAR) and will be available in the demat account under ISIN code (INE0R4701017).

IPO size to Market cap contribution ratio

One way to assess the significance of the IPO on the market cap of the segment is the ratio of market overall to the IPO size. Alpex Solar Ltd had a market cap of ₹845.43 crore and the issue size was ₹74.52 crore. Therefore, the Market cap contribution ratio of the IPO works out to 11.35 times; which is significantly higher than the median. Remember, this is not the ratio of the market cap to original book value, but the ratio of the market cap created to the size of the IPO. That shows the significance of the IPO to the overall market cap accretion of the stock exchange.