EMS IPO lists at 33.67% premium, tapers post listing

EMS IPO had a strong listing on 21st September 2023, listing at a smart premium of 33.67%, but tapering towards the close to list below the listing price. While the closing price on 21st September 2023 was still above the IPO issue price, it ended up lower than the listing price of the stock on the day of listing. In a sense the stock opened strong and also showed a brief rally, giving up some of the initial gains and closing the day below the listing price. However, the context of the stock market performance must not be forgotten. On 21st September 2023, the day of listing of EMS Ltd, the Nifty ended closed 159 points lower and the Sensex closed 571 points lower. In fact, the Sensex has lost 1,370 points in just the last two days, so closing the listing day with gains is still a good proposition for the stock.

Despite the weak markets, the stock of EMS IPO did manage to hold up quite appreciably and closed with listing gains over the IPO issue price. That can be attributed to the robust subscription data for the IPO. The stock had seen strong subscription in the IPO. The subscription was 76.21X  overall and QIB subscription at 149.98X. Hence the listing was expected to be relatively strong. However, while the listing was strong, the performance strength got impacted by the market weakness over the last two days when the Sensex had overall lost more than 1,370 points amidst a major sell-off. In summation, the performance of EMS Ltd on the day of listing, 21st September 2023, was actually appreciable if you consider the weakness in the markets overall.

EMS IPO subscription and pricing details

The IPO price was fixed at the upper end of the band at ₹211 which was anyways along expected lines considering the extremely strong 76.21X overall subscription and the 149.98X QIB subscription in the IPO. In addition, the retail portion had got subscribed 30.55X in the IPO while the HNI / NII portion also got a healthy subscription of 84.39X. The price band for the IPO was ₹200 to ₹211 per share. On 21st September 2023, the stock of EMS Ltd listed on the NSE at a price of ₹282.05, a very strong premium of 33.67% over the IPO issue price of ₹211. On the BSE also, the stock listed at ₹281.55, a premium of 33.44% over the IPO issue price of ₹211 per share.

How the stock of EMS IPO closed on both exchanges

On the NSE, EMS Ltd closed on 21st September 2023 at a price of ₹278.90. That is a first day closing premium of 32.18% on the issue price of ₹211 but a marginal discount of -1.12% on the listing price of ₹282.05. In fact, the listing price turned out to be between the low price and the high price of the day. On the BSE, the stock closed at ₹279.75. That represents a first day closing premium of 32.58% above the IPO issue price but a discount of -1.80% on the listing price on the BSE of ₹281.55 per share. On both the exchanges, the stock listed strongly above the IPO issue price and also managed to close Day-1 above the IPO issue price, albeit below the opening listing price of the day. In fact, the opening price turned out to be the mid-point for the day as it hovered between the low price of the day and the high price of the day. Clearly, the very weak performance of the markets also had its impact on the stock on 21st September 2023 allowing the stock to close the day below the listing price, albeit above the IPO issue price on both the exchanges. The Nifty and the Sensex had fallen vertically over the last 2 days with the Nifty losing over 390 points and the Sensex over 1,370 points. That is the backdrop for the IPO performance of EMS Ltd.

Price volume story on the NSE

The table below captures the opening price discovery in the pre-open period on the NSE.

Data Source: NSE

Let us look at how the stock traversed on the National Stock Exchange (NSE) on 21st September 2023. On Day-1 of listing, EMS Ltd touched a high of ₹291 on the NSE and a low of ₹268 per share. The premium to the listing price sustained only through part of the day, as the overall pressure of the market started to show up on the stock. Mainboard IPOs also do not have any upper circuit of 5%, unlike SME IPOs. If you look at the range of prices, the stock opening price turned out to be the virtual midpoint for the day between the high price of the day and the low price of the day. The post-listing performance of the IPO stock on 21st September 2023 was impacted by the sharp correction in the markets over the last two days. On Day-1 of listing, the EMS Ltd stock traded a total of 206.15 lakh shares on NSE amounting to value of ₹577.50 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers. The stock closed the day with pending sell orders of 51,922 shares on the NSE.

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 21st September 2023. On Day-1 of listing, EMS Ltd touched a high of ₹290.85 on the BSE and a low of ₹268.60 per share. The premium to the listing price sustained only through part of the day, as the overall pressure of the market started to show up on the stock. Mainboard IPOs also do not have any upper circuit of 5%, unlike SME IPOs. If you look at the range of prices, the stock opening price turned out to be the virtual midpoint for the day between the high price of the day and the low price of the day. The post-listing performance of the IPO stock on 21st September 2023 was impacted by the sharp correction in the markets over the last two days. On Day-1 of listing, the EMS Ltd stock traded a total of 18.21 lakh shares on BSE amounting to value of ₹50.88 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers. The stock closed the day with pending sell orders on the BSE also.

Market capitalization, free float, and delivery volumes

While the volumes on the BSE were not as much as on the NSE, the trend was once again the same. The order book through the day showed a gradual build-up of weakness, although there was support at lower levels too. This was the trend through the entire trading session on 21st September 2023. The sharp fall in the Nifty and the Sensex from higher levels over the last two days also led the stock to stay under pressure. On the NSE, out of the total 206.15 lakh shares traded during the first day of trading, the deliverable quantity represented 75.26 lakh shares or a deliverable percentage of 36.51% on the NSE, which is much lower than the routine listing day median. That shows a lack of delivery action in the counter and too much of speculative volumes, which may have been driven by the market volatility. Even on the BSE, out of the total 18.21 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 7.25 lakh shares representing total deliverable percentage of 39.81%, which is marginally higher than the NSE, but once again much lower than the median delivery percentages that we normally see on the mainboard IPOs. Unlike the SME segment stocks, which are on T2T on the day of listing, the mainboard IPOs permit intraday trading even on the day of listing.

At the close of Day-1 of listing, EMS Ltd had a market capitalization of ₹1,553.47 crore with free-float market cap of ₹295.16 crore. EMS Ltd has issued capital of 5.55 crore shares with a par value of ₹10 per share.