Indifra IPO Lists 10.77% higher, closes at -5% lower circuit

Modest premium listing for Indifra Ltd, then lower circuit

Indifra IPO listed at a premium of 10.77%  above the issue price on 29th December 2023. However, after a modest premium 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 listing price but it still closed above the IPO issue price due to the modest premium on listing. In the aftermath of a modest premium listing and weak markets overall, the stock of Indifra Ltd, closed on 29th December 2023 at the -5% lower circuit. It must be noted here that the Nifty and Sensex were weak on Friday with the Nifty losing 47 points in the day and the Sensex losing 170 points in the day. As an outcome, the stock listed with a modest premium but closed at the lower circuit for the day.

On 29th December 2023, the Nifty closed 47 points lower while the Sensex closed 170 points lower as there was some weekend profit booking in the markets. The Nifty and the Sensex had a frenetic rally reaching new highs towards the end of the calendar year but this also means that the investors are now worried that further upsides may be more halting from the current levels. There was a typical bout of profit booking in the markets on Friday as investors opted to remain light at the end of the week.

Subscription levels, and how it impacted listing of Indifra Ltd

Let us now turn to the subscription story of Indifra Ltd. With tepid subscription of 12.07X for the retail portion, and 2.34X for the QIB portion; the overall subscription was extremely modest at 7.21X. The IPO was a fixed price IPO issue with the IPO price fixed in advance at a level of ₹65 per share. Being a fixed price issue, there was no question of price discovery in this case. The stock listed 10.77%  higher on the NSE. However, subsequently, despite the stock opening modestly strong in a weak market and compounded by tepid 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 relatively weak. 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 but that was not relevant in this case, being a fixed price issue. However, on the day of listing, the stock managed to open higher at a premium of 10.77% above the IPO price, but it went on to close the day at the -5% lower circuit on the listing price at the close of the day.

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

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

Data Source: NSE

The SME IPO of Indifra Ltd was a fixed price issue priced at ₹65 per share. On 29th December 2023, the stock of Indifra Ltd listed on the NSE flat at a price of ₹72.00 per share, which is a modest premium of 10.77% over the issue price of ₹65 per share. However, despite a volatile day post listing on 29th December 2023, the stock of Indifra Ltd closed exactly at the lower circuit price of ₹68.40 per share. The stock had an upper circuit limit of ₹75.60 for the day and a lower circuit limit of ₹68.40 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. The closing price reflects a mixed day of trading, because it closed at the lower circuit after a relatively modest opening for the day. However, this lower circuit comes after a modestly positive opening on a day when the Nifty and the Sensex closed with losses of 47 points and 170 points respectively.

Being an SME IPO on the NSE, the stock of Indifra Ltd was subjected to 5% circuit filter either side 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 modest premium of 10.77% to the issue price. During the day, the stock made attempts to go above the issue price but stayed well below the upper circuit but the close was exactly at the lower circuit price. On the NSE, the stock of Indifra 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 Indifra Ltd on listing day

On Day-1 of listing i.e., on 29th December 2023, Indifra Ltd touched a high of ₹73.00 per share on the NSE and a low of ₹68.40 per share. The high price of the day was just above the opening price of the day and was well below the upper circuit filter limit price of ₹75.60 per share. However,  the stock closed at the lower circuit price of ₹68.40 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 modestly positive listing and weak close, with the Nifty and Sensex also weak along the way.

For the best part of the day, the stock stayed well above the IPO issue price but below the IPO listing price due to the modest 10.77% premium opening. It closed the day exactly at the 5% lower circuit for the day. In terms of the circuit filter limits, the stock of Indifra Ltd had an upper circuit filter limit of ₹75.60 and a lower circuit band limit of ₹68.40. The stock closed the day +5.23% above the IPO issue price of ₹65 per share but the stock closed -5% below the listing price of the day also at ₹72 per share. During the day, the stock of Indifra Ltd just briefly crossed 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 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 modest volumes for Indifra Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Indifra Ltd stock traded a total of 3.70 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹258.82 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 Indifra 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, Indifra Ltd had a market capitalization of ₹49.86 crore with free-float market cap of ₹16.18 crore. It has a total of 72.90 lakh shares as the issued capital of the company and a par value of ₹10 per share. As stated earlier, since the trading is on the T2T segment, the entire volume of 3.70 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market. The stock trades on the NSE SME segment under the trading code (INDIFRA) and will be available in the demat account under ISIN code (INE0PS301014).