India Shelter Finance IPO debuts with 25.76% premium, later declines

Strong listing for India Shelter Finance Corporation Ltd, but falls later

India Shelter Finance Corporation IPO had a very robust listing on 20th December 2023, listing at a smart premium of 25.76%, but it failed to hold on to the listing gains and tapered towards the close of trade on 20th December 2023. While the closing price on 20th December 2023 was surely above the IPO issue price for the day, it closed well below the listing price of the IPO. For the day, the Nifty closed 303 points lower while the Sensex closed a full 931 points lower. Both the Nifty and the Sensex started flat to strong, but fell vertically in the second half of the trading session as the selling picked up aggressively. The post-listing weakness in the price of India Shelter Finance Corporation Ltd on the day of listing was more a direct outcome of the heavy selling in the market.

IPO subscription and pricing details for India Shelter Finance Corporation Ltd

The stock had seen a relatively strong subscription in the IPO. The subscription was 38.59X  overall and QIB subscription was at 94.29X. In addition, the retail portion had got subscribed 10.46X in the IPO while the HNI / NII portion also got a healthy subscription of 29.97X. Hence the listing was expected to be fairly strong for the day. However, while the listing was strong, the post listing performance was not up to the mark. Remember, the circuit filter for most mainboard IPOs is kept at 20% above and below the listing price of the day on the day of listing. In the case of India Shelter Finance Corporation Ltd, the strong subscription allowed price discovery at the upper end of the band and got a good listing, but the close was less than satisfactory. Here is the India Shelter Finance Corporation Ltd listing story on 20th December 2023.

The IPO price was fixed at the upper end of the band at ₹493 per share which was anyways along expected lines considering the relatively strong subscription in the IPO. The price band for the IPO was ₹469 to ₹493 per share. On 20th December 2023, the stock of India Shelter Finance Corporation Ltd listed on the NSE at a price of ₹620 per share, a strong premium of 25.76% above the IPO issue price of ₹493 per share. On the BSE also, the stock listed at ₹612.70 per share, a premium of 24.28% over the IPO issue price of ₹493 per share.

How the stock of India Shelter Finance Corporation Ltd closed on both exchanges

On the NSE, India Shelter Finance Corporation Ltd closed on 20th December 2023 at a price of ₹555 per share. That is a first day closing premium of 12.58% on the issue price of ₹493 per share. However, it marks a discount of -10.48% below the listing price of ₹620 per share. In fact, the listing price turned out to be just below the high price of the day and the stock traded almost for the entire trading day below the opening listing price. On the BSE also, the stock closed at ₹543.50 per share. That represents a first day closing premium of 10.24% above the IPO issue price of ₹493 per share. However, the closing price for the day was at a discount of -11.29% on the listing price on the BSE at ₹612.70 per share. On both the exchanges, the stock listed strongly above the IPO issue price and also managed to close Day-1 above the IPO issue price. However, the pressure of selling was visible on the counter in both the stock exchanges. In fact, on the NSE and the BSE, the opening price turned out to be very near to the higher price of the day. On the other hand, the closing price was much closer to the low price of the day, showing a lot of weakness in the counter post listing.

Remember, that the company is subject to 20% circuit filters on both side. The upper circuit filter on the NSE was ₹744 per share while the lower circuit price on the NSE was ₹496 per share. In comparison, the high price of the day at ₹630 per share was much below the upper circuit price. Even the low price of the day at ₹531 per share was much above the lower circuit limits for the day.

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 20th December 2023. On Day-1 of listing, India Shelter Finance Corporation Ltd touched a high of ₹630 per share on the NSE and a low of ₹531 per share. The premium to the IPO price sustained through but the premium to the listing price could not really be sustained and it turned into discount to listing price. While the low price of the day was just below the IPO closing price, the opening price of India Shelter Finance Corporation Ltd was very close to the high price of the day. Mainboard IPOs do not have an upper circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment. However, on listing day, this IPO was subjected to the standard 20% upper and 20% lower circuit limit.

The High Price of the day at ₹630 per share was well below the upper circuit price of ₹744 per share. Similarly, the Low Price of the day at ₹531 per share was well above the lower circuit price of ₹496 per share. On Day-1 of listing, the India Shelter Finance Corporation Ltd stock traded a total of 218.58 lakh shares on NSE amounting to value of ₹1,264.02 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 serious selling emerging towards the end. The stock closed the day with pending unfulfilled buy orders of on the NSE to the tune of 20,967 shares.

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 20th December 2023. On Day-1 of listing, India Shelter Finance Corporation Ltd touched a high of ₹625 per share on the BSE and a low of ₹530.95 per share. The premium to the IPO price sustained through but the premium to the listing price could not really be sustained and it turned into discount to listing price. While the low price of the day was just below the IPO closing price, the opening price of India Shelter Finance Corporation Ltd was very close to the high price of the day. Mainboard IPOs do not have an upper circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment. However, on listing day, this IPO was subjected to the standard 20% upper and 20% lower circuit limit.

The High Price of the day at ₹625 per share was well below the upper circuit price of ₹735.20 per share. Similarly, the Low Price of the day at ₹530.95 per share was well above the lower circuit price of ₹490.20 per share. On Day-1 of listing, the India Shelter Finance Corporation Ltd stock traded a total of 12.74 lakh shares on BSE amounting to value of ₹73.29 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 serious selling emerging towards the end. The stock closed the day with pending unfulfilled buy orders of on the BSE, with buying emerging only towards the end, after seeing selling pressure through the entire day.

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 pressure and that almost sustained till the close of trading session. The sharp fall in the Nifty and the Sensex ensured that the stock of India Shelter Finance Corporation Ltd could not sustain these gains. On the NSE, out of the total 218.58 lakh shares traded during the first day of trading, the deliverable quantity represented 119.96 lakh shares or a deliverable percentage of 54.88% on the NSE, which is at par with the routine listing day median. That shows a lot of delivery action in the counter. Even on the BSE, out of the total 12.74 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 4.69 lakh shares representing total deliverable percentage of 36.86%, 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, India Shelter Finance Corporation Ltd had a market capitalization of ₹5,818.23 crore with free-float market cap of ₹1,047.28 crore. India Shelter Finance Corporation Ltd has issued capital of 1,070.51 lakh shares with a par value of ₹5 per share. The stocks will be held in the demat account vide ISIN Number (INE922K01024).