Graphisads IPO Lists Flat, Closes -5% at Lower Circuit

Flat listing for Graphisads Ltd, then hits lower circuit

Graphisads IPO had an absolutely flat listing on 13th December 2023, listing just 0.45% above the issue price of ₹111 per share. 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 strong markets overall, the stock of Graphisads IPO, closed on 13th December 2023 at the -5% lower circuit. It must be noted here that the Nifty and Sensex were modestly strong on Wednesday and despite that the stock listed flat and closed at the lower circuit for the day.

On 13th December 2023, the Nifty closed 20 points higher while the Sensex closed 34 points higher in response to the positive cues coming from domestic and US inflation as well as the smartly better IIP growth number. In the last few days, the Nifty has been volatile but has managed to hold the 20,800 mark, and today it closed at 20,926 levels. The rather tepid performance of the stock is not too surprising on listing day because while the overall sentiments in the market remained modestly strong, the subscription levels of the IPO of Graphisads Ltd were very tepid in the IPO, and that eventually rubbed off on the performance on the first day of listing of the stock.

Subscription levels, and how it impacted listing of Graphisads Ltd

Let us now turn to the subscription story of Graphisads Ltd. With tepid subscription of 5.52X for the retail portion, and 2.01X for the HNI / NII portion; the overall subscription was extremely tepid at 3.86X. The IPO was a fixed price IPO issue with the IPO price already fixed at the level of ₹111 per share. The stock listed absolutely flat on the NSE with gains of just about 0.45%. However, subsequently, despite the stock opening flat in a strong market and supported by very modest subscription numbers, the stock went on to close at the lower circuit of -5% on the listing price.

This was reflective of pressure on the stock at higher levels, on a day when overall market sentiments were modestly strong. The subscription normally impacts the price discovery in book building issues and the listing price. The strong subscription has a positive impact on the ability of the stock  in two ways. Firstly, it leads to the stock price getting discovered at the upper end of the band which was not applicable in this case as it was a fixed price IPO. However, on the day of listing, the stock managed to open just about flat at the IPO price, but it went on to close the day at the -5% lower circuit on listing price at the close of trade.

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

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

Data Source: NSE

The SME IPO of Graphisads Ltd was priced at ₹111 per share, being the fixed price of the IPO. On 13th December 2023, the stock of Graphisads Ltd listed on the NSE flat at a price of ₹111.50 per share, which is exactly 0.45% above the IPO issue price of ₹111 per share. However, despite a volatile day post listing on 13th December 2023, the stock of Graphisads Ltd closed exactly at the lower circuit price of ₹105.95 per share. The stock had an upper circuit limit of ₹117.05 for the day and a lower circuit limit of ₹105.95 for the day.

In the midst of the volatility in trading during the day, the stock never got much 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, which is where it spent locked most of the trading day. 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 modest to strong gains.

Being an SME IPO on the NSE, the stock of Graphisads 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 at a huge premium to the issue price. During the day, the stock made attempts to hit the upper circuit but stayed well below the upper circuit.

However, the close was exactly at the lower circuit price. In fact, the highest price that it could get to after opening at ₹111.50 per share was a peak price of ₹112 per share. On the NSE, the stock of Graphisads 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 Graphisads Ltd on listing day

On Day-1 of listing i.e., on 13th December 2023, Graphisads Ltd touched a high of ₹112.00 per share on the NSE and a low of ₹105.95 per share. The high price of the day was just a tad above the opening price of the day and was well below the upper circuit filter limit price of ₹117.05 per share. However,  the stock closed at the lower circuit price of ₹105.95 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 modestly strong performance by the Nifty and Sensex. In fact, the stock spent most of the day, locked in the lower circuit price.

For the best part of the day, the stock stayed well below the IPO issue price and also the IPO listing price, which were almost one and the same for the day, barring a small gap of 45 bps. It closed the day exactly at the 5% lower circuit for the day. In terms of the circuit filter limits, the stock of Graphisads Ltd had an upper circuit filter limit of ₹117.05 and a lower circuit band limit of ₹105.95. The stock closed the day -4.55% below the IPO issue price of ₹111 per share and also closed -5% below the listing price of the day also at ₹111.50 per share which triggered the lower circuit on the stock.

During the day, the stock of Graphisads Ltd never crossed the ₹112 mark, which was just marginally above 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 1,200 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.

Moderate to robust volumes for Graphisads Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Graphisads Ltd stock traded a total of 6.30 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹699.55 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 Graphisads 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, Graphisads Ltd had a market capitalization of ₹193.64 crore with free-float market cap of ₹51.01 crore. It has a total of 182.77 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 6.30 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market.