Arvind and Company Shipping Agencies IPO Lists at 77.8% premium, closes flat

Premium listing for Arvind and Company Shipping Agencies IPO, flat close

Arvind and Company Shipping Agencies IPO had a very strong listing on 25th October 2023, listing at a premium of 77.8%, but subsequently closed flat with the closing price exactly at the listing price. Of course, the stock closed comfortably above the IPO issue price at the close of trading on 25th October 2023. What stood out was the performance of the stock even in the midst of a sharp fall in the markets overall. On Wednesday, 25th October 2023, the Nifty closed 160 points in the red while the Sensex closed 523 points lower. In the last few days, the Nifty has fallen nearly 700 points while the Sensex has fallen more than 2,000 points. The weakness in the market was largely on account of the sharp sell-off in the Nifty amidst aggressive profit booking. It is not just the rise of geopolitical risk but the sharp spike in the US bond yields that is spooking the Indian markets.

Let us now turn to the subscription story of Arvind and Company Shipping Agencies Ltd. With heft subscription of 321.97X for the retail portion, and 436.05X for the HNI / NII portion; the overall subscription was extremely healthy at 385.03X. The IPO was a fixed price issue with the IPO price already fixed at ₹45 per share. The stock listed at a strongly positive premium of 77.8%, even on a day when the market sentiments were extremely weak overall. However, subsequently, the stock managed to hold the same level at close despite the high levels of intraday volatility in the markets. This was reflective of strength in the stock amidst the weak broader market sentiments. The subscription normally impacts the price discovery in book building issues and the listing price. While this was a fixed price issue, the strong subscription had a positive impact on the ability of the stock to hold gains in a market where the indices were falling sharply.

Stock closes Day-1 flat, after a very strong start

Here is the pre-open price discovery for the Arvind and Company Shipping Agencies IPO on the NSE.

Data Source: NSE

Arvind and Company Shipping Agencies IPO was priced at ₹45 per share, via the fixed IPO pricing method. On 25th October 2023, the stock of Arvind and Company Shipping Agencies Ltd listed on the NSE at a price of ₹80, a premium of 77.8% over the IPO issue price of ₹45. However, despite a volatile day post listing on 25th October 2023, the stock of Arvind and Company Shipping Agencies Ltd closed exactly at the listing price of ₹80 per share. The stock had an upper circuit limit of ₹84 for the day and a lower circuit limit of ₹76 for the day. In the midst of the volatility in trading during the day, the stock hit the upper circuit and the lower circuit before eventually closing the day exactly at the listing price. The closing price may look like a tepid day of trading, but it masks the extent of volatility visible during the day trading session.

Being an SME IPO on the NSE, the stock of Arvind and Company Shipping Agencies 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 and the closing price of the day actually turned out to be the mid-point of the day. During the day, the stock hit the upper circuit and the lower circuit but the close was exactly at the listing price only. On the NSE, the stock of Arvind and Company Shipping Agencies 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 Arvind and Company Shipping Agencies IPO on listing day

On Day-1 of listing i.e., on 25th October 2023, Arvind and Company Shipping Agencies Ltd touched a high of ₹84 on the NSE and a low of ₹76 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 lower circuit price of the stock. Between these two extreme prices, the stock was extremely volatile and eventually closed at the opening price of the day. In fact, the stock can be said to have enjoyed a strong listing and a close at the listing price on a day when the Nifty was down 160 points and the Sensex was down about 523 points.

Through the day, the stock stayed above the IPO issue price at any point of time although it hovered above the below the listing price of the day. In terms of the circuit filter limits, the stock of Arvind and Company Shipping Agencies Ltd had an upper circuit filter limit of ₹84 and a lower circuit band limit of ₹76. During the day, the stock of Arvind and Company Shipping Agencies Ltd hit the upper circuit and the lower circuit before closing exactly at the listing price for the day. The stock closed flat for the day with 3,000 buy quantity 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 Arvind and Company Shipping Agencies IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Arvind and Company Shipping Agencies Ltd stock traded a total of 24.66 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹1,971.57 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 pending buy orders at the close, although the price was volatile during the day. It must be noted here that Arvind and Company Shipping Agencies 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, Arvind and Company Shipping Agencies Ltd had a market capitalization of ₹97.10 crore with free-float market cap of ₹35.93 crore. It has a total of 121.378 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 24.66 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market.