TGIF Agribusiness IPO Listed 61.29% Higher, Hits Lower Circuit

Strong listing for TGIF Agribusiness IPO, then lower circuit

TGIF Agribusiness IPO had a very strong listing on 15th May 2024, listing at a premium of 61.29%. After a modest opening, the stock closed the day at the -5% lower circuit on the listing price. For the day, the stock closed above the IPO issue price but below the IPO listing price at the close of trading on 15th May 2024. What also stood out about the stock was the strong listing despite the tepid overall market sentiments; leading to the failure of the stock to hold on to its listing gains. For the day, the Nifty closed -17 points lower, while the Sensex closed a full -118 points lower. The negative sentiments in the market just happened to restrict the stock price performance of TGIF Agribusiness Ltd on listing day, as it closed at lower circuit despite a strong start.

Subscription and price performance of TGIF Agribusiness IPO on listing day

Let us now turn to the subscription story of TGIF Agribusiness IPO. With robust subscription of 32.92X for the retail portion, and 35.35X for the HNI / NII portion; the overall subscription was modestly strong at 36.28X. The IPO was a fixed price issue with the IPO price fixed at ₹93 per share. Being a fixed price issue, there was no question of price discovery in this case.

Despite a strong listing on 15th May 2024, the stock went on to close the day at the lower circuit, but also tried getting very close to the upper circuit of the day. This was reflective of strength in the stock amidst the volatile market sentiments. However, such strength could not be sustained as the stock ended the day at the lower circuit for the day. The subscription impacts the price discovery in fixed price issues in 2 ways. Firstly, the modest subscription ensured that the stock price listing was at a premium of 61.29% to the issue price. Secondly, due to the negative bouts of volatility in the markets, the stock closed at the -5% lower circuit for 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 TGIF Agribusiness Ltd on the BSE.

Data Source: BSE

The SME IPO of TGIF Agribusiness Ltd was a fixed price IPO and priced at ₹93 per share. On 15th May 2024, the stock of TGIF Agribusiness Ltd listed on the BSE at a price of ₹150 per share, a premium of 61.29% over the IPO issue price of ₹93. However, despite a volatile day post listing on 15th May 2024, the stock of TGIF Agribusiness Ltd closed exactly at the lower circuit price of ₹142.50 per share on the BSE SME segment. The stock had an upper circuit limit of ₹157.50 for the day and a lower circuit limit of ₹142.50 per share for the day. In the midst of the volatility in trading during the day, the stock got fairly close to the upper circuit but gravitated eventually towards the lower circuit, which is where it closed for the day. The stock showed weakness after a strong listing and closed at the lower circuit price of -5%.

The closing price reflects a modestly weak day of trading, because it closed at the lower circuit despite briefly getting close to the upper circuit and after listing at a very healthy premium of 61.29% to the issue price. Also, the lower circuit comes on top of 61.29% premium listing of the stock. As a result, the closing price of the stock of TGIF Agribusiness Ltd was still a full 53.23% above the issue price at the close of the first day of listing on the BSE SME segment. This can be called a reasonable listing show, especially considering that the stock had shown signs of volatility in the morning. However, the lower circuit on listing day does dampen the sentiments surrounding the stock.

Listed in the BSE MT segment for trade in T2T

Being an SME IPO on the BSE, the stock of TGIF Agribusiness Ltd was subjected to 5% circuit filter on listing day and was also in the MT (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. It is 5% either ways. The low price of the day was exactly the closing price and that was also the lower circuit for the day. However, during the day, the stock did try to get close to the upper circuit price of the day, although it did fall short of the upper circuit price.

On the BSE, the stock of TGIF Agribusiness Ltd has been admitted to trade in the MT category. The MT category is specifically for the SME segment of the BSE 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. However, such stocks continue to trade either in T+1 or T+2 settlement cycles. The stock of TGIF Agribusiness Ltd will be trading in the T+1 rolling settlement cycle.

How prices traversed for TGIF Agribusiness IPO on listing day?

On Day-1 of listing i.e., on 15th May 2024, TGIF Agribusiness Ltd touched a high of ₹156.80 per share on the BSE and a low of ₹142.50 per share. The high price of the day was just short of the upper circuit limit price of the stock while the stock low price of the day was exactly the lower circuit price, and well below the listing circuit of the day. Between these two 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 strong listing despite a tepid performance for the day by the Nifty and Sensex. TGIF Agribusiness Ltd closed at -5% lower circuit despite getting a strong opening on listing day on the BSE. It is a BSE-SME IPO.

During the trading day, the stock of TGIF Agribusiness Ltd opened well above the issue price but closed at the lower circuit price of the day. In terms of the circuit filter limits, the stock of TGIF Agribusiness Ltd had an upper circuit filter limit of ₹157.50 per share and a lower circuit band limit of ₹142.50 per share. The stock closed the day 53.23% above the IPO issue price of ₹93 per share but it also closed -5% below the listing price of the day at ₹150 per share. During the day, the stock of TGIF Agribusiness Ltd got close to the upper circuit but then gravitated towards the lower circuit and stayed locked in the lower circuit for better part of the day. The stock closed weak after a strong opening. It closed at the lower circuit with unmet sell quantity and no buyers in the counter. For the SME IPOs on the BSE, 5% is the upper limit and also the lower circuit on the listing price.

Modest volumes for TGIF Agribusiness IPO on listing day

Let us now turn to the volumes of the stock on the BSE. On Day-1 of listing, the TGIF Agribusiness Ltd stock traded a total of 2.41 lakh shares on BSE SME segment amounting to trading value (turnover) of ₹358 lakhs on the first day. The order book during the day showed a lot of selling after listing with the sell orders consistently exceeding the buy orders at any point of time. That also led the stock to close with pending sell orders (unmet) at the end of the trading session. It must be noted here that TGIF Agribusiness 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 shifts for error trades adjustment.

At the close of Day-1 of listing, TGIF Agribusiness Ltd had a market capitalization of ₹36.87 crore with free-float market cap of ₹9.96 crore. As stated earlier, since the trading is on the T2T segment (MT segment of BSE), the entire volume of 2.41 lakh shares during the day is accounted by delivery trades only, barring some error trade exceptions in the market. The stock trades on the BSE SME segment under the trading code (544175) and will be available in the demat account under ISIN code (INE0SMU01015).

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. TGIF Agribusiness Ltd had a market cap of ₹36.87 crore and the issue size was ₹6.39 crore. Therefore, the Market cap contribution ratio of the IPO works out to 5.77 times; which is slightly higher than the median for BSE-SME IPOs. 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.