Suraj Estate Developers IPO Lists -5.56% lower, tapers further

Weak listing and tepid close for Suraj Estate Developers Ltd

Suraj Estate Developers Ltd had a weak listing on 26th December 2023, listing at a small discount of -5.56% to the issue price, and tapering further from the listing price. While the closing price on 26th December 2023 was below the IPO issue price for the day, it also closed below the listing price of the IPO. For the day, the Nifty ironically closed 92 points higher while the Sensex closed a full 230 points higher. Both the Nifty and the Sensex showed strength through the day and despite such strength shown by the markets overall, the listing of Suraj Estate Developers IPO was weak and tepid, as was the close for the day.

IPO subscription and pricing details

The stock had seen a relatively modest subscription in the IPO. The subscription was 16.57X  overall and QIB subscription was at 24.74X. In addition, the retail portion had got subscribed 9.85X in the IPO while the HNI / NII portion also got a healthy subscription of 20.02X. Hence the listing was expected to be moderate at best for the day. However, the listing performance got marred despite the overall markets being robust. However, the to the credit of the stock, there was not too much price damage on the stock. Here is the Suraj Estate Developers Ltd listing story on 26th December 2023.

The IPO price of Suraj Estate Developers Ltd was fixed at the upper end of the band at ₹360 which was anyways along expected lines considering the relatively modest subscription in the IPO. The anchor investment allocation had also happened at ₹360 per share. The price band for the IPO was ₹340 to ₹360 per share. On 26th December 2023, the stock of Suraj Estate Developers Ltd listed on the NSE at a price of ₹340 per share, a discount of -5.56% on the IPO issue price of ₹360 per share. On the BSE also, the stock listed at ₹343.80 per share, a discount of -4.50% on the IPO issue price of ₹360 per share.

How the stock of Suraj Estate Developers Ltd closed on both exchanges

On the NSE, Suraj Estate Developers Ltd closed on 26th December 2023 at a price of ₹334.90 per share. That is a first day closing discount of -6.97% on the issue price of ₹360 per share and also a discount of -1.50% on the listing price of ₹340 per share. In fact, the closing price of the day turned out to very close to the low price of the day and traded for most of the day below the listing price. On the BSE also, the stock closed at ₹343.80. That represents a first day closing discount of -7.14% on the IPO issue price of ₹360 per share and also a discount of -2.76% on the listing price on the BSE of ₹343.80 per share. On both the exchanges, the stock listed well below the IPO issue price and also lost further ground at the close of Day-1. The low price of the day and the closing price were pretty close to each other, but that did not talk about the much deeper volatility in the stock price. The high price and the low price did betray a lot of volatility in the stock price, although both these prices were well away from the 20% circuit filters applicable to the stock of Suraj Estate Developers Ltd on the day of listing i.e., 26th December 2023.

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, Suraj Estate Developers Ltd touched a high of ₹354.45 on the NSE and a low of ₹324.05 per share. The discount to the listing price sustained through most part of the day while the stock very rarely went above the IPO issue price at any point during the trading session. The high and low price range does tell a lot about the volatility during the day, although the prices stayed well clear of the circuit filters. Mainboard IPOs do not have an upper or lower circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment.

However, the stock of Suraj Estate Developers Ltd was subjected to 20% circuit filter on either. That translated into an upper circuit price of Suraj Estate Developers Ltd on the NSE at ₹408.00 per share and a lower circuit price of the stock at  ₹272.00 per share. The low price and the high price of the day was well clear of the circuit filters on the NSE. On Day-1 of listing, the Suraj Estate Developers Ltd stock traded a total of 58.34 lakh shares on NSE amounting to value of ₹199.96 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 some buying emerging towards the end. The stock closed the day with pending buy orders of 15,203 shares on the NSE.

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, Suraj Estate Developers Ltd touched a high of ₹354.35 on the BSE and a low of ₹323.95 per share. The discount to the listing price sustained through most part of the day while the stock very rarely went above the IPO issue price at any point during the trading session. The high and low price range does tell a lot about the volatility during the day, although the prices stayed well clear of the circuit filters. Mainboard IPOs do not have an upper or lower circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment.

However, the stock of Suraj Estate Developers Ltd was subjected to 20% circuit filter on either. That translated into an upper circuit price of Suraj Estate Developers Ltd on the BSE at ₹412.55 per share and a lower circuit price of the stock at  ₹275.05 per share. The low price and the high price of the day was well clear of the circuit filters on the BSE. On Day-1 of listing, the Suraj Estate Developers Ltd stock traded a total of 3.65 lakh shares on BSE amounting to value of ₹12.52 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 some buying emerging towards the end. The stock closed the day with pending buy orders of shares on the BSE.

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 selling with buying emerging in the final part of the trading session. The rally in the Nifty and the Sensex really did not deter the stock too much as it fell marginally below the issue price and the listing price. However, it must be said that the stock did take support during the trading session. On the NSE, out of the total 58.34 lakh shares traded during the first day of trading, the deliverable quantity represented 23.19 lakh shares or a deliverable percentage of 39.75% on the NSE, which is much lower than the routine listing day median on the NSE.

That shows a lot of speculative action on the counter mixed with delivery buying. Even on the BSE, out of the total 3.65 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 1.14 lakh shares representing total deliverable percentage of 31.13%, which is much lower than the delivery ratio on the NSE. Unlike the SME segment stocks, which are on T2T on the day of listing, the mainboard IPOs permit intraday trading even on the day of listing.

At the close of Day-1 of listing, Suraj Estate Developers Ltd had a market capitalization of ₹1,482.99 crore with free-float market cap of ₹266.94 crore. Suraj Estate Developers Ltd has issued capital of 443.61 lack shares with a par value of ₹5 per share.