Mono Pharmacare IPO lists at 3.57% premium, hits upper circuit

Tepid listing for Mono Pharmacare IPO; then hits upper circuit

Mono Pharmacare IPO had a tepid listing on 07th September 2023, listing at a very tepid premium of just 3.57%, but subsequently closing at the upper circuit. On listing day, for SME NSE stocks, the upper circuit is calculated on the opening list price of the stock and not on the issue price. Despite the tepid listing, the stock of Mono Pharmacare Ltd still managed to close above the IPO issue price of ₹28 per share, and also above the listing price on 07th September 2023. To an extent the market was helped by the sentiments in the market with the Nifty closing with gains of 116 points and well above the level of 19,700. However, it must be said here that Mono Pharmacare Ltd had scaled the upper circuit in early trades itself and ended the day at the upper circuit with no sellers on the counter. The buying pressure in the counter through the day was much more than the sell side pressure, helping the stock to stay locked in the upper circuit for better part of the day.

The stock of Mono Pharmacare IPO showed a lot of robustness, despite a very moderate listing on the bourses. To an extent, the positive sentiments in the market also played a role and the situation could have been different had the markets cracked. The stock opened above the issue price and then in a show of strength, it managed to close at the upper circuit of 5% and held on at that level till the end of the day. Being an NSE SME IPO, it is only traded on the SME segment of NSE. Mono Pharmacare Ltd opened 3.57% higher and not only held that level but even got itself locked into upper circuit of 5%, where it stayed put through the day. The opening price of the day proved to be the low point of the day and the stock closed at the high price of the day, which was also the 5% upper circuit for the stock.

The stock closed the day 5% above the IPO listing price and 8.75% above the IPO price of ₹28 per share. With subscription of 19.40X for the retail portion, 8.00X for the HNI / NII portion and 10.89X for the QIB portion; the overall subscription was moderate to strong at 13.42X. The subscription numbers were relatively tepid compared to the normal benchmark subscriptions that SME IPOs get, but it was healthy nevertheless. These subscription numbers allowed the stock to list at a moderate premium on a day when the market sentiments were also relatively strong. However, it the stock managed to hit the upper circuit after opening and then managed to hold on for the day. Here is the listing day story of Mono Pharmacare for 07th September 2023, the day of listing.

Mono Pharmacare Ltd lists on Day-1 at marginal premium, then rallies

Here is the pre-open price discovery for the Mono Pharmacare SME IPO on the NSE.

Data Source: NSE

Mono Pharmacare IPO was a book building IPO in the price band of ₹26 to ₹28 per share. The IPO price was discovered at the upper end of the band at ₹28 per share via the book building methodology. On 07th September 2023, the stock of Mono Pharmacare Ltd listed on the NSE at a price of ₹29, a premium of 3.57% on the IPO issue price of ₹28. Not surprisingly, the price was discovered at the upper end of the band for the IPO, which is routine where the subscription is above 7X levels.

However, the stock faced absolutely no pressure and could traverse through the day above the listing price and even managed to close the day at the 5% upper circuit price of ₹30.45, per share. Now, the closing price is 8.75% above the IPO issue price and 5% above the listing price of the stock on the first day of listing. It closed the day exactly at the upper circuit of the stock at 5%, which is the statutory norm for SME IPO, since they list on trade to trade (T2T) basis only. The listing cannot be classified as disappointing, although it can be said to be largely tepid start followed by an encouraging close.

In a nutshell, the stock of Mono Pharmacare Ltd had closed the day exactly at the 5% upper circuit relative to the IPO listing price. The opening listing price turned out to be the low price of the day while the stock closed exactly at the high price of the day, which also marked the 5% upper circuit filter. 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. However, that was not really relevant for Mono Pharmacare ltd, which closed at the 5% upper circuit for the day.

How prices traversed for Mono Pharmacare IPO on listing day

On Day-1 of listing i.e., on 07th September 2023, Mono Pharmacare Ltd touched a high of ₹30.45 on the NSE and a low of ₹29 per share. The high price of the day was 5% upper circuit level for the day, while the opening listing price turned out to be the low price for the day. Once the stock hit the upper ceiling circuit, it just stayed locked at that level.

All SME stocks, by default, are introduced to trading in the SME segment on trade-to-trade basis. That means, these stocks will mandatorily be on pure delivery basis (intraday not permitted), while the stock would be subjected to 5% circuit limits on the upside and on the downside. What is truly appreciable is that the stock closed relatively positive despite the relatively tepid subscription numbers for the IPO of Mono Pharmacare Ltd. The stock touched the 5% upper circuit during the day and stayed locked at that level through the day. It actually closed the day with 1,20,000 buy quantity pending and no sellers on the counter. For the SME IPOs, 5% is the upper limit and also the lower circuit on the listing price on the day of listing.

Moderate volumes for Mono Pharmacare IPO on listing day

Let us now turn to the volumes of Mono Pharmacare Ltd on the NSE. On Day-1 of listing, the Mono Pharmacare Ltd stock traded a total of 20.24 lakh shares on NSE SME segment amounting to value of ₹599.71 lakhs on the first day.  The order book during the day showed a lot of consistent buying with the buy orders consistently exceeding the sell orders at any point of time.

It must be noted here that Mono Pharmacare 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, Mono Pharmacare Ltd had a market capitalization of ₹53.80 crore with free-float market cap of ₹23.29 crore. It has a total of 176.69 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 20.24 lakh shares during the day, barring some trade related exceptions, is accounted for only by delivery trades.

Read more about Mono Pharmacare IPO

Brief on the business model of Mono Pharmacare Ltd

Mono Pharmacare Ltd was incorporated in 1994 and is engaged in marketing and distribution of pharmaceutical products. It counts top pharma companies in India as its key clients. Mono Pharmacare Ltd is a distributor and supplier of a wide array of pharmaceuticals products and medicines. Mono Pharmacare Ltd offers healthcare and cosmocare products as part of its portfolio. Under healthcare products, it offers antibiotic medicines, cough and cold related anti allergic medicines, antifungal medicines, Nutraceutical medicines, analgesic, antipyretic medicines, Antacid medicines, and cardiac–diabetic medicines. Under Cosmocare products the company offers sunscreen lotions, charcoal anti-pollution facewash, deep cleansing facewash, aqua lemon skin rejuvenating facewash and foaming facewash.

On distribution side, Mono Pharmacare Ltd works directly with over 23 companies including marquee names like Abbot, Reddy Labs, Elder Pharma, Eris Lifesciences, HLL Lifecare, Mylan, Novo Nordisk, Pfizer, Sanofi, Torrent Pharma, Cadilla, Alembic, Emcure and Wockhardt. The Ahmedabad Medical Corporation works closely with over 13 companies including Bayer, Cipla, Natco, Sun Pharma, Zydus and Micro Labs. Finally, Supal Distributors unit works closely with Alkem, Biocon, Ajanta Pharma, GlaxoSmithKline, Lupin, Hetero, Intas and Johnson & Johnson.

Mono Pharmacare Ltd was promoted by Panilam Lakhatariya and Supal Lakhatariya. The promoter holding in the company currently stands at 81.02%. However, post the fresh issue of shares and the OFS, the promoter equity holding share will reduce to 56.72%. The fresh issue funds will be used by the company for meeting its working capital needs and for general corporate expenses. Unistone Capital Private Ltd will be the lead manager to the issue, while Bigshare Services Private Ltd will be the registrar to the issue. The market maker for the issue is Rikhav Securities Ltd.