Entero Healthcare Solutions IPO Lists -2.33% lower, falls further

Weak listing for Entero Healthcare Solutions Ltd, dips further

Entero Healthcare Solutions IPO had a weak listing on 16th February 2024, listing at a discount of -2.33% to the issue price, and falling further from the listing price. While the closing price on 16th February 2024 was below the IPO issue price for the day, it also closed below the listing price of the IPO. For the day, the Nifty closed 130 points higher while the Sensex closed a full 376 points higher. Both the Nifty and the Sensex were volatile during the day, but with a positive side. On a favourable note, the Nifty did close above the psychological 22,000 mark on Friday, while the Sensex closed above 72,400. The news flows in the week pertaining to inflation and IIP were positive but the real positive news flow came from the trade data as the trade deficit tapered, but most importantly, the overall trade deficit (adjusted for services surplus) came in almost at zero for January 2024. However, FPI flows continued to be negative for the latest week to 16th February 2024.

IPO subscription and pricing details

The stock had seen relatively tepid subscription in the IPO, with the IOP subscription just about getting through. The subscription was 1.53X  overall and QIB subscription was at 2.28X. In addition, the retail portion had got subscribed 1.33X in the IPO while the HNI / NII portion got a tepid subscription of just 0.22X. Hence the listing was expected to be fairly moderate to weak for the day. However, the listing performance could not be helped much by the Nifty closing 130 points higher in the day and the Sensex closing 376 points higher in the day. While the stock of Entero may not have lost much of value post listing, the tepid subscriptions ensured that there was not much of buying interest in the stock on listing day. Here is the Entero Healthcare Solutions Ltd listing story on 16th February 2024.

The IPO price of Entero Healthcare Solutions Ltd was fixed at the upper end of the band at ₹1,258 per share which was anyways along expected lines and is the norm for most IPOs that even get just about subscribed. The anchor investment allocation had also happened at ₹1,258 per share and, in fact, the response to the anchor portion had been quite strong. The price band for the IPO was ₹1,195 to ₹1,258 per share. On 16th February 2024, the stock of Entero Healthcare Solutions Ltd listed on the NSE at a price of ₹1,228.70, a moderate discount of -2.33% on the IPO issue price of ₹1,258 per share. On the BSE also, the stock listed at ₹1,245 per share, a discount of -1.03% on the IPO issue price of ₹1,258 per share.

How the stock of Entero Healthcare Solutions Ltd closed on both exchanges

On the NSE, Entero Healthcare Solutions Ltd closed on 16th February 2024 at a price of ₹1,150.10 per share. That is a first day closing discount of -8.58% on the issue price of ₹1,258 and also a discount of -6.40% on the listing price of ₹1,228.70 per share. In fact, the closing price of the day turned out lower than the listing price of the day and the stock closed the day very near to the low price of the day. On the BSE also, the stock closed at ₹1,149.50. That represents a first day closing discount of -8.62% on the IPO issue price of ₹1,258 per share and also represents a discount of -7.67% on the listing price on the BSE of ₹1,245 per share. The weakness got accentuated during the day’s trading.

On both the exchanges, the stock listed below the IPO issue price and also drifted lower at the close of Day-1. The IPO issue price of Rs1,258 per share turned out to the high price of the day on the NSE and the BSE, underlining a very weak sentiment on the stock on listing day on 16th February 2024. In fact, the stock did not cross the IPO issue price on either of the stock exchanges. The stock performance was also impacted by the fact that the markets were very volatile on the NSE and on the BSE during the day, despite the indices eventually ending the day in positive territory. The high price and the low price did betray a lot of volatility in the stock price, although both these prices were well away from the 20% circuit filters applicable to the stock of Entero Healthcare Solutions Ltd on the day of listing i.e., 16th February 2024. However, the price did not cross the issue price on both exchanges.

Price volume story of Entero Healthcare Solutions Ltd 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 16th February 2024. On Day-1 of listing, Entero Healthcare Solutions Ltd touched a high of ₹1,258 per share on the NSE and a low of ₹1,141 per share. The discount to the listing price sustained through most part of the day while the stock never went above the IPO issue price at any point during the trading session. The IPO issue price of Rs1,258 turned out to be the high price of the day on the NSE. The high and low price range does tell a lot about the volatility during the day, although the prices stayed well clear of the circuit filters. Mainboard IPOs do not have an upper or lower circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment.

However, the stock of Entero Healthcare Solutions Ltd was subjected to 20% circuit filter on either. That translated into an upper circuit price of Entero Healthcare Solutions Ltd on the NSE at ₹1,474.40 per share and a lower circuit price of the stock at  ₹983 per share. On the NSE, the high price of the day at ₹1,258 per share was well short of the upper circuit price of ₹1,474.40 per share while the low price of the day at ₹1,141 per share was also well above the lower circuit price of ₹983 per share. On Day-1 of listing, the Entero Healthcare Solutions Ltd stock traded a total of 17.89 lakh shares on NSE amounting to value of ₹215.35 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, with some scattered buying emerging towards the end. The stock closed the day with pending sell orders of 631 shares on the NSE.

Price volume story of Entero Healthcare Solutions Ltd on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 16th February 2024. On Day-1 of listing, Entero Healthcare Solutions Ltd touched a high of ₹1,258 per share on the BSE and a low of ₹1,141.80 per share. The discount to the listing price sustained through most part of the day while the stock never went above the IPO issue price at any point during the trading session. The IPO issue price of Rs1,258 turned out to be the high price of the day on the BSE, also. The high and low price range does tell a lot about the volatility during the day, although the prices stayed well clear of the circuit filters. Mainboard IPOs do not have an upper or lower circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment.

However, the stock of Entero Healthcare Solutions Ltd was subjected to 20% circuit filter on either. That translated into an upper circuit price of Entero Healthcare Solutions Ltd on the BSE at ₹1,493.95 per share and a lower circuit price of the stock at  ₹996 per share. On the BSE, the high price of the day at ₹1,258 per share was well short of the upper circuit price of ₹1,493.95 per share while the low price of the day at ₹1,141.80 per share was also well above the lower circuit price of ₹996 per share. On Day-1 of listing, the Entero Healthcare Solutions Ltd stock traded a total of 1.38 lakh shares on BSE amounting to value of ₹16.61 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, with some scattered buying emerging towards the end. The stock closed the day with pending sell orders on the BSE too.

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 lot of selling with buying emerging in the final part of the trading session. The rally in the Nifty and the Sensex really did not make much of a difference to the stock performance as the focus was more on . That makes it a rather attractive stock after being able to hold its own on tough listing day. On the NSE, out of the total 17.89 lakh shares traded during the first day of trading, the deliverable quantity represented 5.56 lakh shares or a deliverable percentage of 31.07% on the NSE, which is lower than the routine listing day median on the NSE.

That shows a fair level of speculative action on the counter. Even on the BSE, out of the total 1.38 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 0.52 lakh shares representing total deliverable percentage of 37.27%, which is better than the delivery ratio on the NSE. 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, Entero Healthcare Solutions Ltd had a market capitalization of ₹4,999.61 crore with free-float market cap of ₹799.94 crore. Entero Healthcare Solutions Ltd has issued capital of 434.94 lack shares with a face value of ₹10 per share. The stock trades on the NSE main segment under the trading code (ENTERO); on the BSE with trading code (544122) and will be available in the demat account under ISIN code (INE010601016).

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 capitalization overall to the IPO size. Entero Healthcare Solutions Ltd had a market cap of ₹4,999.61 crore and the issue size was ₹1,600 crore. Therefore, the Market cap contribution ratio of the IPO works out to 3.12 times; which is relatively low for an IPO. 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.