GPT Healthcare IPO Lists at 15.59% premium; tapers later

Strong listing for GPT Healthcare IPO, but tapers later

GPT Healthcare IPO had a robust listing on 29th February 2024, listing at a smart premium of 15.59%, but it failed to hold on to the listing gains and tapered towards the close of trade on 29th February 2024. While the closing price on 29th February 2024 was surely above the issue price of GPT Healthcare IPO, it closed below the listing price of the IPO. For the day, the Nifty closed 32 points higher while the Sensex closed a full 195 points higher. Both the Nifty and the Sensex started flat to weak, but recovered sharply in the second half of the trading session. The post-listing weakness in the price of GPT Healthcare Ltd on the day of listing was more a direct outcome of weak opening of the market and the rather tepid subscriptions numbers in the IPO. However, as we shall see later, the price of GPT Healthcare Ltd did show a small recovery towards the end of the trading day.

Pricing details for GPT Healthcare IPO and Subscription Details

The stock had seen a very modest subscription in the IPO. The subscription was 8.52X  overall and QIB subscription was at 17.30X. In addition, the retail portion had got subscribed 2.44X in the IPO while the HNI / NII portion also got a modest subscription of 11.02X. Hence the listing was expected to be fairly modest for the day. However, while the listing was positive, the post listing performance was not up to the mark. Remember, the circuit filter for most mainboard IPOs is kept at 20% above and below the listing price of the day on the day of listing. In the case of GPT Healthcare Ltd, the strong subscription allowed price discovery at the upper end of the band and got a good listing, but the close was less than satisfactory. Here is the GPT Healthcare Ltd listing story on 29th February 2024.

The IPO price was fixed at the upper end of the band at ₹186 per share which was anyways along expected lines considering the relatively modest subscription in the IPO. The price band for the IPO was ₹177 to ₹186 per share. On 29th February 2024, the stock of GPT Healthcare Ltd listed on the NSE at a price of ₹215 per share, a robust premium of 15.59% above the IPO issue price of ₹186 per share. On the BSE also, the stock listed at ₹216.15 per share, a premium of 16.21% over the IPO issue price of ₹186 per share.

How the stock of GPT Healthcare IPO closed on both exchanges

On the NSE, GPT Healthcare IPO closed on 29th February 2024 at a price of ₹200.25 per share. That is a first day closing premium of 7.66% on the issue price of ₹186 per share. However, it marks a discount of -6.86% below the listing price of ₹215 per share. In fact, the listing price turned out to be closer to the high price of the day and the stock traded almost for the entire trading day below the opening listing price. On the BSE also, the stock closed at ₹200.75 per share. That represents a first day closing premium of 7.93% above the IPO issue price of ₹186 per share. However, the closing price for the day was at a discount of -7.12% on the listing price on the BSE at ₹216.15 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. However, the pressure of selling was visible on the counter in both the stock exchanges. The good thing is that in both the stock exchanges, the closing price of the stock represented a minor late bounce from the lower levels of the stock price during the day, in tandem with the bounce in the markets in the second half of the day.

Remember, that the company is subject to 20% circuit filters on both side. The upper circuit filter on the NSE was ₹258 per share while the lower circuit price on the NSE was ₹172 per share. In comparison, the high price of the day at ₹219.90 per share was much below the upper circuit price. Even the low price of the day at ₹196.10 per share was much above the lower circuit limits for the day. However, what stood out about the stock was the late bounce from the lower levels of the day at close and the closure with pent up buying.

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 29th February 2024. On Day-1 of listing, GPT Healthcare Ltd touched a high of ₹219.90 per share on the NSE and a low of ₹196.10 per share. The premium to the IPO price sustained through but the premium to the listing price could not really be sustained and it turned into discount to listing price. While the stock was volatile during the day, what stood out about the performance on the exchange during the day was the minor bounce in the stock price from lower levels towards the end, which was also supported by the stock closing with net buyers. 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. However, on listing day, this IPO was subjected to the standard 20% upper and 20% lower circuit limit.

The High Price of the day at ₹219.90 per share was well below the upper circuit price of ₹258 per share. Similarly, the Low Price of the day at ₹196.10 per share was well above the lower circuit price of ₹172 per share. On Day-1 of listing, the GPT Healthcare Ltd stock traded a total of 207.44 lakh shares on NSE amounting to value of ₹430.39 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 buying emerging towards the end. The stock closed the day with pending unfulfilled buy orders on the NSE to the tune of 14,423 shares.

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 29th February 2024. On Day-1 of listing, GPT Healthcare Ltd touched a high of ₹219.70 per share on the BSE and a low of ₹196.10 per share. The premium to the IPO price sustained through but the premium to the listing price could not really be sustained and it turned into discount to listing price. While the stock was volatile during the day, what stood out about the performance on the exchange during the day was the minor bounce in the stock price from lower levels towards the end, which was also supported by the stock closing with net buyers. 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. However, on listing day, this IPO was subjected to the standard 20% upper and 20% lower circuit limit.

The High Price of the day at ₹219.70 per share was well below the upper circuit price of ₹259.35 per share. Similarly, the Low Price of the day at ₹196.10 per share was well above the lower circuit price of ₹172.95 per share. On Day-1 of listing, the GPT Healthcare Ltd stock traded a total of 11.58 lakh shares on BSE amounting to value of ₹24.05 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 buying emerging towards the end. The stock closed the day with pending unfulfilled buy 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 lot of pressure and that almost sustained till the close of trading session. Despite the late bounce in the Nifty and the Sensex, the stock of GPT Healthcare Ltd could not sustain these gains. However, it must be said that this sharp bounce in the market also led the stock to bounce back a little bit from the lower levels of the day. On the NSE, out of the total 207.44 lakh shares traded during the first day of trading, the deliverable quantity represented 97.43 lakh shares or a deliverable percentage of 46.97% on the NSE, which is at par with the routine listing day median. That shows very low delivery action in the counter. Even on the BSE, out of the total 11.58 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 4.35 lakh shares representing total deliverable percentage of 37.57%, which is much lower than the delivery ratio on the NSE and also below the median. 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 on both the stock exchanges.

At the close of Day-1 of listing, GPT Healthcare Ltd had a market capitalization of ₹1,647.25 crore with free-float market cap of ₹395.34 crore. GPT Healthcare Ltd has issued capital of 820.55 lakh shares with a par value of ₹10 per share. The stock is listed on the NSE under the NSE Code (GPTHEALTH) and it is listed on the BSE under the BSE Code (544131). The stocks will be held in the demat account vide ISIN Number (INE486R01017).

IPO size to Market cap contribution ratio for GPT Healthcare

One way to assess the significance of the IPO on the market cap of the segment is the ratio of market overall to the IPO size. GPT Healthcare Ltd had a market cap of ₹1,647.25 crore and the issue size was ₹525.14 crore. Therefore, the Market cap contribution ratio of the IPO works out to 3.14 times, which is quite healthy from the perspective of mainboard IPOs. 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.