Kay Cee Energy & Infra IPO Lists 367% up, closes at -5% lower circuit

Bumper listing for Kay Cee Energy & Infra IPO, then lower circuit

Kay Cee Energy & Infra IPO had a bumper listing on the NSE, listing at ₹252.00 per share; an incredible premium of 366.67% to the issue price of ₹54 per share on 05th January 2024. However, after a bumper opening, the stock struggled under the selling pressure and closed the day at the -5% lower circuit on the listing price. Despite the lower circuit on the stock during the day, the stock of Kay Cee Energy & Infra IPO still closed at a substantial premium of 343.33% over the IPO issue price, although it did close at a discount of -5% to the listing price of ₹252 per share. Despite the strong listing and the moderately positive undertone of the markets overall, the stock of Kay Cee Energy & Infra Ltd still closed at the -5% lower circuit at the close of 05th January 2024.. It must be noted here that the Nifty and Sensex were moderately positive on Friday; with the Nifty gaining 52 points in the day and the Sensex gaining about 179 points in the day. During the day, the Nifty and the Sensex were volatile with an upward bias, but managed to close with fairly moderate gains for the day. However, the stock, after a bumper listing, ended up closing at the lower circuit of the day.

On 05th January 2024, the Nifty closed 52 points higher while the Sensex closed 179 points higher as there was some element of caution and volatility in the markets after the frenetic rally in the markets in the previous few weeks. In the last few weeks of 2023, the Nifty and the Sensex had gone through a frenetic rally reaching new highs towards the end of the calendar year. However, this also means that the investors are getting slightly sceptical that further upsides may be limited or at least it may be a struggle from the current levels. There was a typical bout of profit booking in the markets during the current week as investors were a bit cautious about market levels. Also, January has traditionally not been a great month for markets and has generally witnessed a rather sharp correction. That could have also weighed on the minds of the traders and played on the market sentiments.

Mega Subscription levels, and how it impacted listing of Kay Cee Energy & Infra IPO

Let us now turn to the subscription story of Kay Cee Energy & Infra IPO. With mega subscription of 1,311.10X for the retail portion, 127.71X for the QIB portion and 1,668.97X for the non-retail HNI / NII portion; the overall subscription was extremely huge at 1,052.45X. The IPO was a book building issue with the IPO price band fixed in the range of ₹51 per share to ₹54 per share. Being a book built issue, it was hardly surprising that the price discovery happened at the upper end of the band at ₹54 per share. The stock listed with bumper gains of 366.67% on the NSE. However, subsequently, due to the stock opening so much higher than the issue price and due to the general volatility in the market, it went on to close at the lower circuit of -5% on the listing price on 05th January 2024.

This was reflective of pressure on the stock at higher levels, on a day when overall market sentiments were moderately strong. The subscription normally impacts the price discovery in book building issues and the listing price. The strong subscription had a positive impact on the ability of the stock  in two ways. Firstly, it leads to the stock price getting discovered at the upper end of the band; and that was the case here as the price got discovered at the upper band of ₹54 per share. On the day of listing, the stock managed to get a bumper opening of 366.67% over the IPO issue price of ₹54 per share. However, eventually, the stock went on to close the day at the -5% lower circuit on the listing price of ₹252 per share.

Stock closes Day-1 at lower circuit, after an absolutely flat opening

Here is the pre-open price discovery for the SME IPO of Kay Cee Energy & Infra Ltd on the NSE.

Data Source: NSE

The SME IPO of Kay Cee Energy & Infra Ltd was a book built issue priced at the upper band of ₹54 per share. On 05th January 2024, the stock of Kay Cee Energy & Infra Ltd listed on the NSE at a price of ₹252 per share, which is a whopping premium of 366.67% over the IPO price. However, amidst a volatile day post listing on 05th January 2024, the stock of Kay Cee Energy & Infra Ltd closed exactly at the lower circuit price of ₹239.40 per share. The stock had an upper circuit limit of ₹264.60 per share for the day and a lower circuit limit of ₹239.401 per share for the day of listing i.e., 05th January 2024.

In the midst of the volatility in trading during the day, the stock price briefly touched the upper circuit for the day, but later reversed to settle at the lower circuit price of the day, which is where the stock closed on 05th January 2024. The closing price reflects a mixed day of trading, because it closed at the lower circuit after a bumper opening for the day and after traversing to touch the upper circuit price during the trading session. However, this lower circuit comes after a very strong listing on a day when the Nifty and the Sensex closed with gains of 52 points and 179 points respectively; amidst a lot of market volatility.

Trade to Trade (ST) category SME listing

Being an SME IPO on the NSE, the stock of Kay Cee Energy & Infra Ltd was subjected to 5% circuit filter either side on listing day and was also placed in the ST (trade to trade) segment, specifically for SME stocks. That means, only delivery trades are permitted on the stock. Like the upper circuit price, even the lower circuit price on listing day is calculated on the listing price and not on the IPO price. The opening price of the day was at a substantial premium of 366.67% over the issue price of ₹54 per share. During the day, the stock was volatile at opening and even touched the upper circuit limit, before reversing and locking into the lower circuit price for the rest of the day, which is where the stock closed on 05th January 2024. On the NSE, the stock of Kay Cee Energy & Infra Ltd has been admitted to trade in the ST category. The ST category is specifically for the SME Emerge segment of the NSE with compulsory trade to trade settlement. On such stocks, netting of positions is not permitted and every trade has to be settled by delivery only.

How prices traversed for Kay Cee Energy & Infra IPO on listing day?

On Day-1 of listing i.e., on 05th January 2024, Kay Cee Energy & Infra Ltd touched a high of ₹264.60 per share on the NSE and a low of ₹239.40 per share. The high price of the day was above the opening price of the day and was exactly at the upper circuit filter limit price of ₹264.60 per share. However,  the stock closed at the lower circuit price of ₹239.40 per share. Between these two extreme prices, the stock was relatively volatile and eventually closed at the lower circuit price of the day. In fact, the stock can be said to have enjoyed a bumper listing and weak close, with the Nifty and Sensex also volatile along the way. However, it is not too common for a stock to close at the lower circuit after getting such a robust listing in the morning.

For the best part of the day, the stock stayed well below the IPO listing price; albeit substantially above the IPO issue price after the bumper listing of the stock in the morning. It closed the day exactly at the -5% lower circuit for the day. In terms of the circuit filter limits, the stock of Kay Cee Energy & Infra Ltd had an upper circuit filter limit of ₹264.60 and a lower circuit band limit of ₹239.40. The stock closed the day 343.33% above the IPO issue price of ₹54 per share but the stock also closed -5% below the listing price of the day. During the day, the stock of Kay Cee Energy & Infra Ltd briefly crossed the IPO listing price, and even managed to hit the upper circuit for the day. However, the stock touched the lower circuit price of the day before actually closing locked at lower circuit at close for the day. The stock closed under pressure at the lower circuit at the close of the day with sell quantity of 4,000  shares and no buyers in the counter. For the SME IPOs, it may be recollected, that 5% is the upper limit and also the lower circuit limit on the listing price on the day of listing. This circuit is not contingent on the issue price in any way.

Robust volumes for Kay Cee Energy & Infra IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Kay Cee Energy & Infra Ltd stock traded a total of 16.10 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹4,001.66 lakhs on the first day. The order book during the day showed a lot of volatility with the sell orders consistently exceeding the buy orders at any point of time post the bumper listing. That also led the stock to close at the lower circuit of the day with pending sell orders at the end of the trading session, although the price was volatile during the day. It must be noted here that Kay Cee Energy & Infra 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, Kay Cee Energy & Infra Ltd had a market capitalization of ₹262.38 crore with free-float market cap of ₹78.06 crore. It has a total of 109.60 lakh shares as the issued capital of the company and a par value of ₹10 per share. As stated earlier, since the trading is on the T2T segment, the entire volume of 16.10 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market. The stock trades on the NSE SME segment under the trading code (KCEIL) and will be available in the demat account under ISIN code (INE0RCG01017).

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 overall to the IPO size. Kay Cee Energy & Infra Ltd had a market cap of ₹262.38 crore and the issue size was ₹15.93 crore. Therefore, the Market cap contribution ratio of the IPO works out to an impressive 16.47 times. 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.