Crayons Advertising IPO lists at 38.5% premium, gains further

Crayons Advertising IPO had a strong listing on 02nd June 2023, listing at an impressive premium of 38.5% on the NSE SME-IPO segment, but subsequently gaining still further to decisively close above the IPO price and also the listing price. In a sense, the markets were positive on Friday and that helped sentiments on the stock of Crayons Advertising Ltd as the Nifty closed above the 18,530 mark; well above its last resistance level of 18,400 but still some way for the next resistance of 18,800 levels.

On a day when the market sentiments were strong, Crayons Advertising Ltd managed to close very strong with smart gains for the listing day. For now, the headwinds like the inversion of the yield curve, the negative news flows on banks and the possible global slowdown are the major talking points and continue to keep the markets under pressure. However, despite these challenges, the stock of Crayons Advertising Ltd managed to hold strong for the day on listing day.

The stock of Crayons Advertising Ltd did show a lot of strength during the day, never really losing momentum of any sort. The stock closed above the listing price as well as the issue price on the first day of trading on the NSE. Being an NSE SME IPO, it is only traded on the SME segment of NSE. Crayons Advertising Ltd opened 38.5% higher and the opening price of ₹90 per share turned out to be the low price for the day. With subscription of 45.20X for the QIB portion, 169.94X for the retail portion and 171.71X for the HNI / NII portion; the overall subscription was quite healthy at 137.28X. The subscription numbers were so strong that it allowed the stock to list at a huge premium and then sustain the premium post listing and close still higher for the day. In fact, the stock closed at the highest point of the day.

The SME IPO of Crayons Advertising Ltd was priced at the upper end of the band of ₹65 via book building issue. On 02nd June 2023, the stock of Crayons Advertising Ltd listed on the NSE SME-IPO segment at a price of ₹90, a premium of 38.5% on the IPO issue price of ₹65. However, the stock bounced sharply even from these levels as the opening price became the low point for the day and the stock closed exactly at the high point of the day. The closing price of ₹94.50, which is 45.4% above the IPO price and 5% above the listing price of the stock on the first day of listing was also the high point of the day. In a nutshell, the stock of Crayons Advertising Ltd had closed the day exactly at the upper circuit price for the stock of 5% with only buyers and no sellers. The upper 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 the low price of the day. In SME IPOs, the 5% movement is the maximum permitted to circuit.

On Day-1 of listing i.e., on 02nd June 2023, Crayons Advertising Ltd touched a high of ₹94.50 on the NSE and a low of ₹90 per share. The opening price turned out to be the low point of the intraday price movement while the stock closed exactly at the high point of the day. Incidentally, the closing price also represented the 5% upper circuit price of the stock for the day, which is the maximum that the SME IPO stock is permitted to move in the day; as calculated from the opening price. What is truly appreciable is that the stock closed strong despite the overall Nifty closing with moderate gains and the markets continuing to be remain volatile through the day. The stock closed at the 5% upper circuit with 192,000 buy quantity and no sellers. For the SME IPOs, 5% is the upper limit over the listing price on the day of listing.

Let us now turn to the volumes of the stock on the NSE SME IPO segment. On Day-1 of listing, the Crayons Advertising Ltd stock traded a total of 22.28 lakh shares on NSE SME segment amounting to value of ₹2,037.51 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 helped the stock to close at the upper end of the circuit filter. It must be noted here that Crayons Advertising 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, Crayons Advertising Ltd had a market capitalization of ₹230.86 crore and a free float market capitalization of ₹43.86 crore. It has a total of 244.30 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 22.28 lakh shares during the day is accounted for only by delivery trades.

A quick background of Crayons Advertising Ltd. The company was incorporated nearly 3 decades back in 1986 and positioned as an integrated marketing and communications agency. It offers a 360-degree view to the client problem spectrum and also offers a 360-degree solution to the clients. It is in the confluence of Adtech and Martech businesses verticals. Crayons Advertising Ltd offers top of the line creative brand marketing strategy, online and  offline media planning as well as media buying. Moreover, Crayons kept pace with the big digital shift and now offers cutting-edge digital expertise, on-ground as well as virtual activation capabilities. Its solutions are largely platform agnostic and work across platforms like TV, print, internet, radio etc.

Crayons offers communication services and advertising media services as two verticals. The latter comprises brand strategy, Events, Print Media, Digital Media, and out-of-home (OOH) Media services. In terms of deliverables, Crayons offer advertisement modes including Newspapers, Brochures, Magazines, Television Channels, FM channels, and Outdoor Hoardings. In short, clients have the benefit of an array of delivery channels for the output.

The fresh issue portion will be used to fund its working capital expenditure and for technology to facilitate expansion. The issue will be lead managed by Corporate Capital Ventures Private Limited while Skyline Financial Services Private Ltd will be the registrars to the SME IPO of Crayons Advertising Ltd.