S J Logistics India IPO debuts with a 40% surge, hitting the upper circuit on listing

Premium listing for S J Logistics (India) IPO, then upper circuit

S J Logistics (India) IPO had a very strong listing on 19th December 2023, listing at a premium of 40%. 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 19th December 2023. This strong performance of the stock was on a day when the Nifty and the Sensex made moderate gains. On 19th December 2023, the Nifty closed 34 points higher while the Sensex closed 122 points higher. In the last few days, the Nifty has been volatile but has managed to hold the 21,000 mark during the week and that is what matters to the market. Today, the Nifty closed above the 21,450 mark. The strength in the Nifty and the Sensex is on the back of follow-up buying in Indian markets in the aftermath of the strong GDP numbers in India and the dovish tone of the Fed policy announced. The upgrade of GDP in the RBI monetary policy has also helped.

Subscription and price performance of S J Logistics (India) IPO on listing day

Let us now turn to the subscription story of S J Logistics IPO. With hefty subscription of 356.33X for the retail portion, 489.45X for the HNI / NII portion, and 116.16X for the QIB portion; the overall subscription was extremely healthy at 316.26X. The IPO was a book built IPO with the IPO price band set in the range of ₹121 to ₹125 per share. The stock listed at a strongly positive premium of 40%. 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 improving market sentiments. 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, the impact on the price discovery was that the price got discovered at the upper end of the price band. Secondly, the strong subscription led the stock to list at a premium of 40% on the listing day and also close at the upper circuit of the day, despite the Nifty and the Sensex being volatile through most of the day.

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

Here is the pre-open price discovery for the SME IPO of S J Logistics (India) Ltd on the NSE.

Data Source: NSE

The SME IPO of S J Logistics (India) Ltd was a book built issue with the price band in the range of ₹121 to ₹125 per share. On 19th December 2023, the stock of S J Logistics (India) Ltd listed on the NSE at a price of ₹175, a premium of 40% over the IPO issue price of ₹125. However, despite a volatile day post listing on 19th December 2023, the stock of S J Logistics (India) Ltd closed exactly at the upper circuit price of ₹183.75 per share. The stock had an upper circuit limit of ₹183.75 for the day and a lower circuit limit of ₹166.25 for the day. In the midst of the volatility in trading during the day, the stock hit the lower circuit and also later hit the upper circuit but stayed put at the upper circuit price for the better part of the day. The closing price reflects a strong day of trading, because it closed at the upper circuit despite the price dipping below the listing price and briefly also hitting the lower circuit. Also, the upper circuit comes on top of a 40% premium listing of the stock, which is all the more appreciable, considering that the Nifty and the Sensex had shown high levels of volatility on the day of listing of S J Logistics (India) Ltd.

Being an SME IPO on the NSE, the stock of S J Logistics (India) 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. During the day, the stock price dipped below the opening price and also touched the lower circuit briefly. However, the stock also showed strength to bounce from lower levels and hit the upper circuit, where it stayed locked in for better part of the day. During the day, the stock hit the upper circuit but also touched the lower circuit in volatile trades before eventually closing locked at the upper circuit of 5% above the listing price. The lower circuit was the lowest price point of the day. On the NSE, the stock of S J Logistics (India) 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 S J Logistics (India) IPO on listing day

On Day-1 of listing i.e., on 19th December 2023, S J Logistics (India) Ltd touched a high of ₹183.75 per share on the NSE and a low of ₹166.25 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 the lower circuit price; although it spent most of the day above the listing price. 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 and this is despite the fact that the Nifty and the Sensex were actually quite volatile during the day. It spent much of the trading day in the negative zone but in the latter part of the trading session, the indices bounced back into the positive zone.

During the trading day, the stock briefly dipped below the listing price of ₹175 per share, and also touched the lower circuit price of ₹166.25 per share. In terms of the circuit filter limits, the stock of S J Logistics (India) Ltd had an upper circuit filter limit of ₹183.75 and a lower circuit band limit of ₹166.25. The stock closed the day 47% above the IPO issue price of ₹125 per share and it also closed 5% above the listing price of the day at ₹175 per share. During the day, the stock of S J Logistics (India) Ltd hit the upper circuit and stayed locked in the upper circuit for most part of the day. The stock price did dip below the listing price and even briefly touched the lower circuit, but quickly bounced back to get locked at the upper circuit price of ₹183.75 per share. The stock closed strong at the upper circuit at the close of the day with 4,000 buy quantity and no sellers in the counter. For the SME IPOs, it may be recollected, that 5% is the upper limit and also the lower circuit on the listing price on the day of listing.

Robust volumes for S J Logistics (India) IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the S J Logistics (India) Ltd stock traded a total of 19.12 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹3,298.77 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 at the end of the trading session, although the price was fairly volatile during the early part of the day. It must be noted here that S J Logistics (India) 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, S J Logistics (India) Ltd had a market capitalization of ₹266.13 crore with free-float market cap of ₹134.02 crore. It has a total of 1,44,83,130 shares (144.83 lakh shares approximately) as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 19.12 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market.