Electro Force India IPO Lists 7.53% higher, hits upper circuit

Premium listing for Electro Force (India) Ltd, then upper circuit

Electro Force (India) Ltd had a strong listing on 27th December 2023, listing at a premium of 7.53%. 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 27th December 2023. What also favoured the performance of the stock was the market support with the Nifty and the Sensex gaining small but sure during the day. On 27th December 2023, the Nifty closed 213 points higher while the Sensex closed 732 points higher. Today, the Nifty closed above the 21,650 mark. The strength in the Nifty and the Sensex is on the back of follow-up buying in Indian markets after the Fed held status quo on rates and the Indian growth story has also come in much better than expected.

Subscription and price performance of Electro Force (India) Ltd on listing day

Let us now turn to the subscription story of Electro Force (India) IPO. With tepid subscription of 6.44X for the retail portion, and 2.12X for the HNI / NII portion; the overall subscription was extremely tepid at 4.28X. The IPO was a fixed price IPO issue with the IPO price already fixed at ₹93 per share. The stock listed at a positive premium of 7.53%,. 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. Firstly, being a fixed price IPO, there was no impact that the subscription had on the price discovery. Secondly on the day of listing, the stock managed to hold gains and close at the upper circuit for the day despite a very tepid opening and despite a very tepid subscription number.

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

Here is the pre-open price discovery for the SME IPO of Electro Force (India) Ltd on the NSE.

Data Source: NSE

The SME IPO of Electro Force (India) Ltd was priced at ₹93 per share, being fixed price IPO. On 27th December 2023, the stock of Electro Force (India) Ltd listed on the NSE at a price of ₹100.00, a premium of 7.53% over the IPO issue price of ₹93. However, despite a volatile day post listing on 27th December 2023, the stock of Electro Force (India) Ltd closed exactly at the upper circuit price of ₹105 per share. The stock had an upper circuit limit of ₹105 for the day and a lower circuit limit of ₹95 for the day. In the midst of the volatility in trading during the day, the stock hit the upper circuit but stayed put at the upper circuit price for the better part of the day. Incidentally, the stock also got perilously close to the lower circuit, although it did not actually hit the lower circuit. The closing price reflects a strong day of trading, because it closed at the upper circuit although it did dip below the listing price, which also happened to be the low price of the day. Also, the upper circuit comes on top of a 7.53% premium listing of the stock, which is all the more appreciable, considering that the Nifty and the Sensex had been positive on the day of listing of Electro Force (India) Ltd, but the stock subscription levels were nothing to write home about.

Being an SME IPO on the NSE, the stock of Electro Force (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. The opening price of the day was the sort of mid-point between the high price and the low price of the day. While, the stock did get close to the lower circuit, it bounced back and locked into the upper circuit from where it did not really budge. During the day, the stock hit the upper circuit but stayed just above the lower circuit but the close was exactly at the upper circuit price. In fact, the stock dipped below the listing price and also got close to the low price during the day. On the NSE, the stock of Electro Force (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 Electro Force (India) Ltd on listing day

On Day-1 of listing i.e., on 27th December 2023, Electro Force (India) Ltd touched a high of ₹105 per share on the NSE and a low of ₹95.10 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 also very close to the lower circuit price for the day. 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 largely supported by a 213 points rally in the Nifty and a 732 points rally in the Sensex.

For the whole trading day, the stock did dip close to the low price but spent most of the day above the listing price and at the upper circuit lock. While the closing price as the upper circuit price of the day, the stock also got close to the lower circuit level for the day. In terms of the circuit filter limits, the stock of Electro Force (India) Ltd had an upper circuit filter limit of ₹105 and a lower circuit band limit of ₹95. The stock closed the day 12.90% above the IPO issue price of ₹93 per share and it also closed 5% above the listing price of the day at ₹100 per share. During the day, the stock of Electro Force (India) Ltd hit the upper circuit and stayed locked in the upper circuit for most part of the day. It did dip below the listing price of the day, and did also get very close to the lower circuit price of the day. The stock closed strong at the upper circuit at the close of the day with 58,800 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 Electro Force (India) Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Electro Force (India) Ltd stock traded a total of 34.80 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹35.25 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 hardly volatile during the day. It must be noted here that Electro Force (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, Electro Force (India) Ltd had a market capitalization of ₹245.70 crore with free-float market cap of ₹91.08 crore. It has a total of 234.00 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 34.80 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market.