Zeal Global Services IPO lists at 42.72% premium, edges higher

Strong listing for Zeal Global Services Ltd, and holds on

Zeal Global Services Ltd had a strong listing on 09th August 2023, listing at a sharp premium of 42.72%, and on top of that it also managed to hit the 5% upper circuit, which is the maximum limit for SME IPOs. For the day, the stock closed comfortably above the IPO issue price as well as the listing price. In a sense, the strength in the markets also helped sentiments around the stock. On 09th August 2023, the NSE Nifty closed 62 points higher at 19,633 levels while the Sensex closed 149 points higher at 65,996 levels. Despite the stock listing with a very strong premium of 42.72%, the stock rallied further and closed at exactly the 5% upper circuit for the day. For SME IPOs, the upper circuit of 5% is calculate from the listing price on the first day.

The stock of Zeal Global Services Ltd did show a lot of strength on opening and tried to hold higher. In terms of the day’s low, it only briefly went below the opening price for the day but quickly recovered to close at the 5% upper circuit. The stock closed above the IPO listing price and also the issue price on the first day of listing. Being an NSE SME IPO, it is only traded on the SME segment of NSE. Zeal Global Services Ltd opened 42.72% higher and the opening price turned out to be very near to the low price for the day. The strength is rather surprising because the subscription was extremely moderate for the company in the IPO. For instance, the subscription level was 3.85X for the retail portion and 4.26X for the HNI / NII portion; resulting in an overall oversubscription of a very moderate 4.06X for the IPO issue as a whole. For such a tepid response, the performance on the day of listing was truly phenomenal. Despite the rather moderate subscription numbers, for the retail and the HNI / NII investors, the stock managed to list at a huge premium on a day when the market sentiments were also fortunately positive. More importantly, it managed to close with substantial gains and even above the listing price.

Stock closes Day-1 at substantial premium

Here is the pre-open price discovery for the SME IPO of Zeal Global Services Ltd on the NSE.

Data Source: NSE

Zeal Global Services IPO was a fixed price issue and the IPO was priced at ₹103 via fixed IPO pricing format. On 09th August 2023, the stock of Zeal Global Services Ltd listed on the NSE at a price of ₹147, a premium of 42.72% on the IPO issue price of ₹103. However, the stock did face some element of pressure during the day and dipped slightly below the listing price before bouncing back to higher levels. On 09ths August 2023, the stock of Zeal Global Services Ltd closed the day at a price of ₹154.35, which is 49.85% above the IPO issue price and 5% above the listing price of the stock on the first day of listing. In a nutshell, the stock of Zeal Global Services Ltd had closed the day exactly at the upper circuit price for the stock of 5% with only buyers and no sellers. For the SME IPOs, the upper circuit and the lower circuit are automatically set at 5% divergence from the listing price, which is the price discovered in the pre-open session on the day of listing. The opening price actually turned out to be very close to the low price of the day.

How prices traversed for Zeal Global Services Ltd on listing day

On Day-1 of listing i.e., on 09th August 2023, Zeal Global Services Ltd touched a high of ₹154.35 on the NSE and a low of ₹142.50 per share. The high price of the day was also exactly the closing price of the stock for the day, which represents the 5% upper circuit for the stock from the price at which it got listed. In short, the closing price represented the 5% upper circuit price of the stock for the day, which is the maximum that the SME IPO stock is allowed to move on the day of listing. What is truly appreciable is that the stock closed strong amidst the Nifty performing moderately well but struggling with levels of 19,600 and 19,800 levels in the market. The stock closed at the 5% upper circuit for the day with 13,200 buy quantity and no sellers. For the SME IPOs, 5% movement represents the upper limit and also the lower circuit on the listing price on the day of listing.

Robust volumes for Zeal Global Services Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Zeal Global Services Ltd stock traded a total of 12.91 lakh shares on NSE SME segment amounting to value of ₹1,947.26 lakhs on the first day.  The order book during the day showed a lot of buying with the buy orders consistently exceeding the buy orders at any point of time. That also led the stock closing at the upper end of the circuit filter. It must be noted here that Zeal Global Services 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, Zeal Global Services Ltd had a market capitalization of ₹205.44 crore based on the closing price for the day. It has a total of 133.10 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 12.912 lakh shares during the day is accounted for only by delivery trades.

Brief on the business model of Zeal Global Services Ltd

Zeal Global Services Ltd, is an SME IPO on the NSE which had opened for subscription on 28th July 2023. The company, Zeal Global Services Ltd, was incorporated in the year 2014 to offer detailed and end-to-end logistic solutions in the air cargo industry. It operates as a General Sales and Service Agent (GSSA) and also acts as a sales partner for various airlines to facilitate the logistics of their air cargo business. Zeal Global Services Ltd is headquartered in Delhi but has operations that are spread out on a pan-India basis.

Broadly, Zeal Global Services Ltd has two verticals viz. cargo carrier service and passenger carrier service. Zeal Global Services Ltd curates logistics solutions for customers based on these verticals and the network and the skill sets built up over time. These solutions are customized to the unique needs of these customers. The company deploys its services across various industries including pharmaceuticals, automotive, fashion and industrials. It also offers sales, marketing, and administrative support for its clients, more as an add-on service.

The IPO of Zeal Global Services Ltd is lead managed by Expert Global Consultants Private Ltd while Skyline Financial Services Private Ltd is the registrar to the issue.