Premier Roadlines IPO: Lists 29.85% higher, hits upper circuit

Strong listing for Premier Roadlines Ltd, then upper circuit

Premier Roadlines Ltd had an incredibly strong listing on 17th May 2024, listing at a premium of 29.85%. After a strong opening, the stock closed the day at the 5% upper circuit over the listing price. For the day, the stock closed comfortably above the IPO issue price and the IPO listing price at the close of trading on 17th May 2024. What also stood out about the stock was the robustly strong listing supported by strong overall market sentiments. For the day, the Nifty closed 62 points higher, while the Sensex closed a full 253 points higher. On both the stock exchanges, the indices were in the negative but bounced sharply from the lows to give a very positive close for the day. The positive sentiments in the market just happened to give a further boost to the stock of Premier Roadlines Ltd on listing day on 17th May 2024.

Subscription and price performance of Premier Roadlines Ltd on listing day

Let us now turn to the subscription story of Premier Roadlines IPO. With robust subscription of 106.50X for the retail portion, 89.95X for the QIB portion, and 180.25X for the HNI / NII portion; the overall subscription was very strong at 117.57X. The IPO was a book building IPO issue in the IPO price band of between ₹63 to ₹67 per share. Being a book building issue, and backed by robust subscriptions, the IPO price got discovered at the upper end of the band at ₹67 per share, which was the issue price of the IPO in this case.

However, subsequently, despite the stock seeing some volatility in the early parts of the day, it went on to close at the upper circuit of 5% over the listing price. This was reflective of strength in the stock amidst the volatile market sentiments. The subscription impacts the price discovery in book built issues and the listing price. The strong subscription had a positive impact on Premier Roadlines Ltd in 3 ways. Firstly, the strong subscription ensured that the IPO price got discovered at the upper end of the price band of ₹138 per share. Secondly, it led to the stock price listing at a strong 29.85% premium to the issue price. Thirdly, despite the pressure of volatility in the markets, the stock closed at the 5% upper circuit for the day, which is a sign of inherent strength in the stock. Incidentally, the opening price of the day at ₹87 per share also proved to be the low price of the day.

Stock closes Day-1 at upper circuit, after a strong listing start

Here is the pre-open price discovery for the SME IPO of Premier Roadlines Ltd on the NSE.

Data Source: NSE

The SME IPO of Premier Roadlines Ltd was a book built IPO and priced at the upper band of ₹67 per share. On 17th May 2024, the stock of Premier Roadlines Ltd listed on the NSE at a price of ₹87 per share, a premium of 29.85% over the IPO issue price of ₹67. However, despite a volatile day post listing on 17th May 2024, the stock of Premier Roadlines Ltd closed exactly at the upper circuit price of ₹91.35 per share on the NSE SME segment. The stock had an upper circuit limit of ₹91.35 for the day and a lower circuit limit of ₹82.65 per share for the day. In the midst of the volatility in trading during the day, the stock hit the upper circuit but never really dipped below the listing price, leave alone getting anywhere close to the lower circuit. However, the stock bounced sharply and closed at the upper circuit price of 5% by the close of trade on 17th May 2024.

The closing price reflects a strong day of trading, because it closed at the upper circuit without even dipping below the listing price of the day or getting anywhere close to the lower circuit price of the day. Also, the upper circuit comes on top of 29.85% premium listing of the stock. Overall, the closing price of the stock of Premier Roadlines Ltd was a full 36.34% above the issue price at the close of the first day of listing on the NSE SME segment. This can be called a commendable listing show, especially considering that the stock had shown signs of volatility in the morning although the stock never really dipped below the listing price; leave along getting anywhere close to the lower circuit price.

Listed in the ST segment for trade in T2T

Being an SME IPO on the NSE, the stock of Premier Roadlines Ltd was subjected to 5% circuit filter on listing day and was also in the ST (trade to trade) segment. 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 low price of the day was exactly at the listing price and hence well above the lower circuit level of the day, while the high price of the day was exactly the upper circuit price of the day. Eventually, the stock closed the day at the upper circuit price of the day.

On the NSE, the stock of Premier Roadlines 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 Premier Roadlines Ltd on listing day

On Day-1 of listing i.e., on 17th May 2024, Premier Roadlines Ltd touched a high of ₹91.35 per share on the NSE and a low of ₹87 per share. The high price of the day was exactly the upper circuit limit price of the stock while the stock low price of the day was exactly at the listing price, and the stock never really dipped below the listing price of the day. Between these two extreme prices, the stock was relatively less volatile and eventually closed at the upper circuit price of the day. In fact, the stock can be said to have enjoyed a strong listing supported by robust performance for the day by the Nifty and Sensex. Premier Roadlines Ltd closed at 5% upper circuit on top of a premium listing on the NSE. In a sense, the day was also marked by a sharp recovery in the Nifty and the Sensex.

During the trading day, the stock of Premier Roadlines Ltd opened well above the issue price and closed at the upper circuit price. In terms of the circuit filter limits, the stock of Premier Roadlines Ltd had an upper circuit filter limit of ₹91.35 and a lower circuit band limit of ₹82.65. The stock closed the day 36.34% above the IPO issue price of ₹67 per share and it also closed 5% above the listing price of the day at ₹87 per share. During the day, the stock of Premier Roadlines Ltd hit the upper circuit and stayed locked in the upper circuit for most part of the day. In fact, the stock had never dipped even below the listing price, leave alone getting anywhere close to the lower circuit price of the day. The stock closed strong at the upper circuit with unmet buy quantity of 1,48,000 shares and no sellers in the counter. For the SME IPOs, 5% is the upper limit and also the lower circuit on the listing price.

Robust volumes for Premier Roadlines Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Premier Roadlines Ltd stock traded a total of 24.96 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹2,209 lakhs on the first day. The order book during the day showed a lot of buying with the buy orders consistently exceeding the sell orders at any point of time. That also led the stock to close with pending buy orders of 1,48,000 shares (unmet) at the end of the trading session. It must be noted here that Premier Roadlines 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, barring some minor adjustments for error trades adjustment.

At the close of Day-1 of listing, Premier Roadlines Ltd had a market capitalization of ₹208.85 crore with free-float market cap of ₹55.03 crore. As stated earlier, since the trading is on the T2T segment, the entire volume of 24.96 lakh shares during the day is accounted by delivery trades only, barring some error trade exceptions in the market. The stock trades on the NSE SME segment under the trading code (PRLIND) and will be available in the demat account under ISIN code (INE0CFG01012). On the NSE SME segment, the stock of Premier Roadlines Ltd trades in the ST (trade to trade) category and has a market lot of 2,000 shares and the face value of the stock is ₹10 per share.

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 cap overall to the IPO size. Premier Roadlines Ltd had a market cap of ₹208.85 crore and the issue size was ₹40.36 crore. Therefore, the Market cap contribution ratio of the IPO works out to 5.17 times; which is at par with the median. 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.