Motisons Jewellers IPO Lists at 98.18% premium; tapers later

Strong listing for Motisons Jewellers Ltd, but tapers later

Motisons Jewellers IPO had a very robust listing on 26th December 2023, listing at a smart premium of 98.18%, but it failed to hold on to the listing gains and tapered towards the close of trade on 26th December 2023. While the closing price on 26th December 2023 was surely above the IPO issue price for the day, it closed below the listing price of the IPO. For the day, the Nifty closed 92 points higher while the Sensex closed a full 230 points higher. Both the Nifty and the Sensex started flat, but recovered sharply in the second half of the trading session. The post-listing weakness in the price of Motisons Jewellers Ltd on the day of listing was more a direct outcome of the profit booking after the listing price was almost double the issue price. However, as we shall see later, the price of Motisons Jewellers Ltd on the NSE closed exactly at the 5% lower circuit, being a small sized issue.

IPO subscription and pricing details for Motisons Jewellers Ltd

The stock had seen a very strong subscription in the IPO. The subscription was 173.23X  overall and QIB subscription was at 135.01X. In addition, the retail portion had got subscribed 135.60X in the IPO while the HNI / NII portion also got a healthy subscription of 311.99X. Hence the listing was expected to be fairly strong for the day. However, while the listing was strong, 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 Motisons Jewellers 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. Also, the circuit filters were kept at 5%, after the stock was allowed to be listed in the BE segment of the NSE, under SDD Compliance. Here is the Motisons Jewellers Ltd listing story on 26th December 2023.

The IPO price was fixed at the upper end of the band at ₹55 per share which was anyways along expected lines considering the relatively strong subscription in the IPO. The price band for the IPO was ₹52 to ₹55 per share. On 26th December 2023, the stock of Motisons Jewellers Ltd listed on the NSE at a price of ₹109 per share, a strong premium of 98.18% above the IPO issue price of ₹55 per share. On the BSE also, the stock listed at ₹103.90 per share, a premium of 88.91% over the IPO issue price of ₹55 per share.

How the stock of Motisons Jewellers Ltd closed on both exchanges

On the NSE, Motisons Jewellers Ltd closed on 26th December 2023 at a price of ₹103.55 per share. That is a first day closing premium of 88.27% on the issue price of ₹55 per share. However, it marks a discount of -5.00% below the listing price of ₹109 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 ₹101.18 per share. That represents a first day closing premium of 83.96% above the IPO issue price of ₹55 per share. However, the closing price for the day was a small discount of -2.62% on the listing price on the BSE at ₹103.90 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 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 normally mainboard companies are subject to 20% circuit filters on both side. However, Motisons Jewellers Ltd being in the BE segment under SDD Compliance, it had a 5% circuit filter on either side on the NSE. The upper circuit filter on the NSE was ₹114.45 per share while the lower circuit price on the NSE was ₹103.55 per share. In comparison, the high price of the day at ₹109.80 per share was much below the upper circuit price. However, the low price of the day at ₹103.55 per share was exactly at the lower circuit limits for the day. The stock closed the day at the 5% lower circuit due to the stock being under BE segment and SDD compliance, limiting the circuits to 5% either ways.

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 26th December 2023. On Day-1 of listing, Motisons Jewellers Ltd touched a high of ₹109.80 per share on the NSE and a low of ₹103.55 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 that the stock eventually closed at exactly the lower circuit price, which is just 5% for the day. 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, the IPO of Motisons Jewellers Ltd was subjected to 5% circuit filter either ways as it was traded in the BE segment under SDD compliance only. Hence the circuit filter was limited to 5% either ways.

The High Price of the day at ₹109.80 per share was well below the upper circuit price of ₹114.45 per share. However, the Low Price of the day at ₹103.55 per share was also exactly the lower circuit price of ₹103.55 per share. On Day-1 of listing, the Motisons Jewellers Ltd stock traded a total of 89.49 lakh shares on NSE amounting to value of ₹95.43 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 serious selling emerging towards the end. The stock closed the day with pending unfulfilled sell orders of on the NSE to the tune of 9,356 shares.

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 26th December 2023. On Day-1 of listing, Motisons Jewellers Ltd touched a high of ₹109.09 per share on the BSE and a low of ₹99.01 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 that the stock eventually touched exactly the lower circuit price, which is just 5% for the day. However, at close it bounced back from that level. 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, the IPO of Motisons Jewellers Ltd was subjected to 5% circuit filter either ways as it was traded in the trade to trade (T) segment on the BSE. Hence the circuit filter was limited to 5% either ways.

The High Price of the day at ₹109.09 per share was exactly at the upper circuit price of ₹109.09 per share. However, the Low Price of the day at ₹99.01 per share was also very close to the lower circuit price of ₹98.71 per share. On Day-1 of listing, the Motisons Jewellers Ltd stock traded a total of 37.63 lakh shares on BSE amounting to value of ₹38.12 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 serious selling emerging towards the end. The stock closed the day with pending unfulfilled sell orders of on the BSE at the close of trade.

 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 Motisons Jewellers 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 sharply from the lower levels of the day on the BSE, if not on the NSE. On the NSE, out of the total 89.49 lakh shares traded during the first day of trading, the deliverable quantity represented 89.49 lakh shares as there was only delivery trading of the stock being in the BE segment on the NSE. There was no intraday action permitted on the stock. Even on the BSE, out of the total 37.63 lakh shares of quantity traded, the deliverable quantity at a gross across client level was the entire 37.63 lakh shares as the stock is in the T (trade to trade) segment and only delivery trades are permitted in the counter. Despite not being an SME segment stock, Motisons Jewellers was in the T2T segment on the BSE and the BE segment on the NSE. Hence all restrictions were applicable to the stock on first day of trading.

At the close of Day-1 of listing, Motisons Jewellers Ltd had a market capitalization of ₹996.08 crore with free-float market cap of ₹209.18 crore. Motisons Jewellers Ltd has issued capital of 984.46 lakh shares with a par value of ₹10 per share. The stocks will be held in the demat account vide ISIN Number (INE0FRK01012).