Basilic Fly Studio IPO lists at 179.38% premium, hits upper circuit

Strong listing for Basilic Fly Studio Ltd, and an upper circuit

Basilic Fly Studio Ltd had a strong listing on 11th September 2023, listing at a sharp premium of 179.38%, and then went on to hit the upper circuit for the day, as if the strong opening was not enough. The stock still closed comfortably above the IPO issue price and the listing price. It was a day of market strength with the Nifty touching 20,000 mark during the day and closing just a tad below that level. The Nifty has gained nearly 800 points in the last 7 session since the start of September 2023. In the midst of such a strong day of trading, the listing of the stock at such a smart premium was on the cards. However, signals of the fantastic listing were already evident in the grey market price even before the stock listed and the buoyancy was evident in the GMP too.

The stock of Basilic Fly Studio IPO did show a lot of strength on opening and managed to hold higher. The strength in the market only helped the stock hold on to its strong opening. The stock closed above the IPO prices issue price and also above the listing price as it closed exactly at the 5% upper circuit. Being an NSE SME IPO, it is only traded on the SME segment of NSE. Basilic Fly Studio Ltd opened 179.38% higher and the opening price turned out to be very close to the low price for the day. With subscription of 415.22X for the retail portion, 549.44X for the HNI / NII portion and 116.34X for the QIB portion; the overall subscription was extremely healthy at 358.60X. The subscription numbers were so strong that it allowed the stock to list at a huge premium and the buoyancy in the markets only helped the cause of premium listing of the stock. The combination of a strong market and solid subscriptions ensured that the company listed at a very steep premium and then went on to hit the upper circuit amidst relentless buying in the counter.

Stock closes Day-1 at substantial premium

Here is the pre-open price discovery for the SME IPO of Basilic Fly Studio Ltd on the NSE.

Data Source: NSE

Basilic Fly Studio IPO was priced in the price band of ₹92 to ₹97 via the book building format. On 11th September 2023, the stock of Basilic Fly Studio Ltd listed on the NSE at a price of ₹271, a premium of 179.38% on the IPO issue price of ₹97 per share. Not surprisingly, the price was discovered at the upper end of the band for the IPO. However, the stock did face some pressure on opening as it briefly dipped below the listing price. However, that was about the only sign of pressure during the day. The stock of Basilic Fly Studio Ltd closed the day at a price of ₹284.55, which is 193.35% above the IPO issue price and 5% above the listing price of the stock on the first day of listing. In a nutshell, the stock of Basilic Fly Studio Ltd had closed the day exactly at the upper circuit price for the stock of 5% with only buyers and no sellers on the counter. 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 actually turned out to be very close to the low price of the day and the stock closed exactly at the high price of the day.

How prices traversed for Basilic Fly Studio IPO on listing day

On Day-1 of listing i.e., on 11th September 2023, Basilic Fly Studio Ltd touched a high of ₹284.55 on the NSE and a low of ₹270 per share. The high price of the day was also the closing price of the stock for the day and it represented the 5% upper circuit. The stock touched a low point of ₹270 during the day, but that was a minor fall below the listing price during the day. Incidentally, the closing price represented the 5% upper circuit price of the stock for the day, which is the maximum that the SME IPO stock is allowed to move in the day. What is truly appreciable is that the stock closed strong despite the listing being at a huge premium, although it must be said that the robust markets helped the stock to close with gains. The stock closed at the 5% upper circuit with 1,57,200 buy quantity and no sellers. For the SME IPOs, 5% is the upper limit and also the lower circuit on the listing price on the day of listing.

Robust volumes for Basilic Fly Studio IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Basilic Fly Studio Ltd stock traded a total of 24.156 lakh shares on NSE SME segment amounting to value of ₹6,689.52 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 at the upper end of the circuit filter with a large quantity of stock buy orders not finding sellers. It must be noted here that Basilic Fly Studio 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, Basilic Fly Studio Ltd had a market capitalization of ₹661.29 crore and free float market capitalization of ₹265.18 crore. It has a total of 232.40 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 24.156 lakh shares during the day is accounted for only by delivery trades, barring some small trade exceptions.

Brief on the business model of Basilic Fly Studio Ltd

Basilic Fly Studio Ltd is one of India’s leading players in visual effects (VFX) and has been Iin this business since 2012. VFX is an amalgam of creativity and technology and the ability and audacity to put both to good use. Basilic Fly Studio Ltd delivers exceptional VFX solutions for a range of projects including movies, TV & OTT series, as well as commercials. The company employs over 500 skilled professionals and has a global reach stretching across India, London, and Vancouver. Be it some of the biggest movies like Hercules, Avengers or Top Gun, Basilic Fly Studio has played a key role in creating enchanting visual effects. Some of the big movies they worked globally include Avataar, Man vs Bee, Extraction, Spider Man, Mary Poppins Returns, Thor, Guardians of the Galaxy, Alice in Wonderland, House of Dragon, Gangs of London, Swan Song and Notre Dame on Fire.

When we talk of VFX, there are several product and service subsets. Here is a quick list of what it includes and the palate of offerings by Basilic Fly Studio Ltd. The offer FX, which elevates any environment through awe-inspiring effects that can change the atmosphere completely. Magnificent creatures come to life, powered by gripping AI technology, and designed by leading VFX artists using animation designs. Recreates rich biomes to transport the audience transport deep into dark forests or rolling tundra regions. Basilic Fly also does Composting, which is about putting life and emotions into abstract shots. It makes the move more engaging. Basilic Fly Studio also specializes in Rotomation, which is a cutting-edge VFX technology to captures the motion of actual actors or objects and apply that data to computer-generated characters. The company also substantially improves the final visual appearance through Paint and Prep and Rotoscopy to improve live videos and produce flawless composites.

The company was promoted by Balakrishnan and Yogalakshmi. The promoter holding in the company currently stands at 85.42%. However, post the fresh issue of shares and the OFS, the promoter equity holding share will reduce to 59.90%. The fresh issue funds will be used by the company for setting up studio facilities in Hyderabad and Salem. It will also use funds to add to existing infrastructure in Chennai and Pune apart from capitalizing its subsidiaries, including its offices at Vancouver in Canada. Part of the funds will also go towards general corporate purposes. While GYR Capital Advisors Private Ltd will be the lead manager to the issue, Purva Share Registry India Private Ltd will be the registrar to the issue. The market maker for the issue is Share India Securities Ltd; and they will be responsible for market making and ensuring liquidity in the counter so as to reduce the basis risk on the stock.