Fedbank Financial Services IPO Listing Day Update

Weak listing for Fedbank Financial Services IPO, flat closing

Fedbank Financial Services IPO had a rather weak listing on 30th November 2023, listing at a small discount of -1.43% on the NSE. However, post the weak listing, the stock held on and even gained marginally to close the day just -0.50% below the IPO issue price of the day. In fact, the closing price was 94 bps above the listing price, which is not bad after a weak opening. The stock of Fedbank Financial Services Ltd closed the day at ₹139.30 per share, a premium of 0.94% over the listing price of ₹138 per share and a marginal discount of -0.50% below the IPO price of ₹140 per share. Certainly, the IPO allottees of Fedbank Financial Services Ltd are unlikely to be too pleased considering the other listing IPOs on the day have given, but would still be happy that the damage to the stock on opening was largely contained. The pattern was exactly similar on the BSE also. On the Bombay Stock Exchange (BSE), the stock of Fedbank Financial Services Ltd opened at ₹137.75 per share, a discount of -1.61% on the IPO issue price of ₹140 per share. For the day, the stock closed on the BSE at ₹140, which is exactly the issue price of the stock. In short, the closing price of the stock on BSE was flat compared to the IPO issue price, but 1.61% higher compared to the tepid listing price of the day.  On the NSE and the BSE, the stock of Fedbank Financial Services Ltd closed the listing day above the listing price of the day, but flat to below the IPO issue price.

While the closing price of Fedbank Financial Services IPO on 30th November 2023 was flat to below the IPO issue price on both the stock exchanges, it also closed above the listing price on the BSE and also on the NSE; albeit only marginally higher. For the day, the Nifty closed 37 points higher while the Sensex closed a full 87 points higher as the Nifty closed above the psychological 20,100 mark on hopes that the growth momentum will sustain in India. Both the Nifty and the Sensex showed moderate gains on Thursday, gaining about 12-13 basis points in a single day of trade. That rubbed off on the stock price performance of Fedbank Financial Services Ltd, which managed to resist any sharp fall in price after listing.

IPO subscription and pricing details

The stock had seen a very weak levels of subscription in the IPO. The subscription was 2.24X  overall and QIB subscription was at 3.48X. In addition, the retail portion had got subscribed 1.88X in the IPO while the HNI / NII portion also got a subscription of just 1.49X. Hence the listing was expected to be flat to weak for the day. However, while the listing was tepid to weak, the stock did manage to hold on for the rest of the day and not doing any more damage itself was quite good. That did not look likely when the stock had just closed the IPO with extremely weak subscription and then opened for listing in the negative.

The IPO price was fixed at the upper end of the band at ₹140 per share which was anyways quite surprising considering the relatively weak to modest subscription in the IPO. The price band for the IPO was ₹133 to ₹140 per share. On 30th November 2023, the stock of Fedbank Financial Services Ltd listed on the NSE at a price of ₹138 per share, a discount of -1.43% on the IPO issue price of ₹140 per share. On the BSE also, the stock listed at ₹137.75, a discount of -1.61% on the IPO issue price of ₹140 per share. Here is the Fedbank Financial Services Ltd listing story on 30th November 2023.

How the stock of Fedbank Financial Services IPO closed on both exchanges?

On the NSE, Fedbank Financial Services Ltd closed on 30th November 2023 at a price of ₹139.30 per share. That is a first day closing discount of -0.50% on the issue price of ₹140 per share and also a very modest premium of 0.94% on the listing price of ₹138 per share. In fact, the listing price turned out to be very close to the middle point of the day on the NSE somewhere between the high price and the low price of the day. On the BSE also, the stock closed at ₹140 per share. That represents a first day flat closing as it closed exactly at the IPO issue price and also a premium of 1.63% above the listing price on the BSE at ₹137.75 per share.

On both the exchanges, the stock listed strongly below the IPO issue price and also managed to close Day-1 by holding the price and not dipping further into losses. In fact, while the stock bounced from listing price on the NSE and closed with only marginal losses, the BSE saw the stock actually closing exactly at the IPO price for the day. In fact, the opening price turned out to be a sort of mid-point between the low price and the high price of the day on the BSE as well as on the NSE. The high price of the day on both the stock exchanges on 30th November 2023 was well below the upper circuit price, while the low price was well above the lower circuit price of the day.  In fact, on the NSE, the stock closed with open selling quantity of 55,372 shares, showing a lot of pent up selling on the stock on the listing day. Similar sentiments were echoed on the BSE also.

Price volume story of Fedbank Financial Services IPO 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 30th November 2023. On Day-1 of listing, Fedbank Financial Services Ltd touched a high of ₹148.25 per share on the NSE and a low of ₹133 per share. The discount to the listing price sustained through most part of the day. The IPO opening listing price and the closing price of the day represented the mid-point between the high price and the low price of the day for Fedbank Financial Services Ltd closed. Mainboard IPOs do not have an upper circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment. In this case, the stock of Fedbank Financial Services Ltd had an upper and lower circuit limit of 20% either ways on the listing price of the day.

For the day on the NSE, the upper circuit price was ₹165.60 per share while the lower circuit price was ₹110.40 per share. During the day, the high price of the day at ₹148.25 did not even manage to get close to the upper band price before correction set in. However, the low price of the day at ₹133 per share was also well above the lower band price for the day at ₹110.40 per share. On Day-1 of listing, the Fedbank Financial Services Ltd stock traded a total of 337.68 lakh shares on NSE amounting to value of ₹479.10 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 very little genuine buying visible even towards the end of the trading session. The stock closed the day with pending sell orders of 55,372 shares on the NSE.

Price volume story of Fedbank Financial Services IPO on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 30th November 2023. On Day-1 of listing, Fedbank Financial Services Ltd touched a high of ₹148 per share on the BSE and a low of ₹133.15 per share. The discount to the listing price sustained through most part of the day. The IPO opening listing price and the closing price of the day represented the mid-point between the high price and the low price of the day for Fedbank Financial Services Ltd closed. Mainboard IPOs do not have an upper circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment. In this case, the stock of Fedbank Financial Services Ltd had an upper and lower circuit limit of 20% either ways on the listing price of the day.

For the day on the BSE, the upper circuit price was ₹168 per share while the lower circuit price was ₹112 per share. During the day, the high price of the day at ₹148 did not even manage to get close to the upper circuit filter before correction set in. However, the low price of the day at ₹133.15 per share was also well above the lower band price for the day at ₹112 per share. On Day-1 of listing, the Fedbank Financial Services Ltd stock traded a total of 17.65 lakh shares on BSE amounting to value of ₹25.10 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 very little genuine buying visible even towards the end of the trading session. The stock closed the day with pending sell orders on the BSE also.

Market capitalization, free float, and delivery volumes

Volumes on the BSE were generally lower than on the NSE, but the trend was once again the same. The order book through the day showed a lot of pressure and that almost sustained till the close of trading session, with very little hint of any sustained buying even by the close of the trading session. The modest rally in the Nifty and the Sensex did help the stock to bounce back from a weak listing, but could not do much else on NSE and on the BSE too. On the NSE, out of the total 337.68 lakh shares traded during the first day of trading, the deliverable quantity represented 154.41 lakh shares or a deliverable percentage of 45.73% on the NSE, which is definitely lower than the routine listing day median and hinting at substantial speculative activity on the NSE.

How was the speculative activity on the BSE on the first day of trading? Even on the BSE, out of the total 17.65 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 6.44 lakh shares representing total deliverable percentage of 36.48%, which is sharply lower than the NSE, but substantially lower than the typical listing day median. On the BSE also, there was a lot of speculative trading volumes visible in the counter. 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 also.

At the close of Day-1 of listing, Fedbank Financial Services Ltd had a market capitalization of ₹5,165.40 crore with free-float market cap of ₹1,291.35 crore. Fedbank Financial Services Ltd has issued capital of 3,689.57 lakh shares with a par value of ₹10 per share.