Sunrest Lifescience IPO Lists flat, closes at -5% lower circuit

Flat listing for Sunrest Lifescience IPO, then lower circuit

Sunrest Lifescience IPO had an absolutely flat listing on 20th November 2023, listing exactly at the issue price. However, after a flat opening, the stock struggled under the selling pressure and closed the day at the -5% lower circuit on the listing price. For the day, the stock closed well below the IPO issue price and also the IPO listing price. Despite a flat listing and marginally weak markets overall, the stock of Sunrest Lifescience IPO, closed on 20th November 2023 at the -5% lower circuit. It must be noted here that the Nifty and Sensex were relatively weak on Monday and that could be one of the triggers why the stock listed flat and closed at the lower circuit for the day.

On 20th November 2023, the Nifty closed 38 points lower while the Sensex closed 140 points lower in the aftermath of the sharp rally in the markets in the previous week. In the last few days, the Nifty has moved up sharply to well above the 19,700 levels and that led to some profit booking around the next resistance level of 19,800 on the Nifty. The rather tepid performance of the stock on listing day can be attributed to the weak market sentiments because the subscription to the IPO was relatively robust.

Subscription levels, and how it impacted listing of Sunrest Lifescience IPO?

Let us now turn to the subscription story of Sunrest Lifescience IPO. With impressive subscription of 65.74X for the retail portion, and 29.17X for the HNI / NII portion; the overall subscription was relatively healthy at 48.54X. The IPO was a fixed price IPO issue with the IPO price fixed at a level of ₹84 per share. However, despite the robust response to the IPO, the stock price for the IPO on listing day opened flat and then gradually drifted lower and closed at the lower circuit of the day. The stock listed absolutely flat on the NSE. However, despite the stock opening flat in a strong market and despite the robust subscription numbers, the stock went on to close at the lower circuit of -5% to the listing price.

This was reflective of pressure on the stock at the listing price levels, on a day when overall market sentiments were relatively tepid. The subscription normally impacts the price discovery in book building issues and the listing price. The strong subscription had a relatively favourable impact on the stock in the that it managed a flat opening for the listing day. However, the weak market sentiments and the selling pressure in the market overall resulted in a sell-off in the counter of Sunrest Lifescience Ltd and the stock eventually closed at the lower circuit for the day.

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

Here is the pre-open price discovery for the SME IPO of Sunrest Lifescience IPO on the NSE.

Data Source: NSE

The SME IPO of Sunrest Lifescience Ltd was priced at ₹84 per share, being the price set as part of the fixed price IPO of the stock. On 20th November 2023, the stock of Sunrest Lifescience Ltd listed on the NSE flat at a price of ₹84.00 per share, which is exactly at the IPO issue price of ₹84 per share. However, despite a volatile day of trading on the NSE, the stock of Sunrest Lifescience Ltd never managed to go above the listing price on 20th November 2023, as the stock of Sunrest Lifescience Ltd eventually closed exactly at the lower circuit price of ₹79.80 per share. The stock had an upper circuit limit of ₹88.20 for the day and a lower circuit limit of ₹79.80 for the day. In the midst of the volatility in trading during the day, the stock never got above the listing price on the day, leave along getting close to the upper circuit. However, the stock eventually closed the day exactly at the lower circuit price. The closing price reflects a mixed day of trading, because it closed at the lower circuit after a flat opening for the day. However, this lower circuit comes after a flat opening on a day when the Nifty and the Sensex recorded small losses in trading.

Being an SME IPO on the NSE, the stock of Sunrest Lifescience 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 opening price of the day was exactly at the IPO issue price. During the day, the stock made attempts to cross the listing price, but it never could manage that; leave alone trying to hit the upper circuit. As a result, the close was exactly at the lower circuit price of the day. On the NSE, the stock of Sunrest Lifescience 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 Sunrest Lifescience IPO on listing day?

On Day-1 of listing i.e., on 20th November 2023, Sunrest Lifescience IPO touched a high of ₹84.00 per share on the NSE and a low of ₹79.80 per share. The high price of the day was the opening price of the day and was well below the upper circuit filter limit price of ₹88.20 per share. However,  the stock closed at the lower circuit price of ₹79.20 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 flat listing and weak close, despite strong subscription numbers and a relatively flat to weak Nifty index.

For the best part of the day, the stock stayed well below the IPO issue price and also the IPO listing price, which were one and the same for the day. It closed the day exactly at the -5% lower circuit for the day. In terms of the circuit filter limits, the stock of Sunrest Lifescience Ltd had an upper circuit filter limit of ₹88.20 and a lower circuit band limit of ₹79.80. The stock closed the day -5.00% below the IPO issue price of ₹79.80 per share and IPO closed -5% below the listing price of the day also at ₹84 per share. During the day, the stock of Sunrest Lifescience Ltd never crossed the IPO listing price, leave alone get close to 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 a good deal of sell quantity 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 on the listing price on the day of listing.

Relatively modest volumes for Sunrest Lifescience IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Sunrest Lifescience Ltd stock traded a total of 3.76 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹308.66 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 flat 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 Sunrest Lifescience 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, Sunrest Lifescience Ltd had a market capitalization of ₹34.24 crore with free-float market cap of ₹10.30 crore. It has a total of 42.912 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 3.76 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market.