Inox India IPO (INOXCVA) Lists at 43.89% premium; tapers later

Strong listing for Inox India Ltd (INOXCVA), but tapers later

Inox India Ltd (INOXCVA) had a very robust listing on 21st December 2023, listing at a smart premium of 43.89%, but it failed to hold on to the listing gains and tapered towards the close of trade on 21st December 2023. While the closing price on 21st December 2023 was surely above the IPO issue price for the day, it closed below the listing price of the IPO. For the day, the Nifty closed 105 points higher while the Sensex closed a full 359 points higher. Both the Nifty and the Sensex started weak, but recovered sharply in the second half of the trading session. The post-listing weakness in the price of Inox India Ltd (INOXCVA) on the day of listing was more a direct outcome of weak opening of the market. However, as we shall see later, the price of Inox India IPO (INOXCVA) recovered sharply from lower levels during the day.

IPO subscription and pricing details for Inox India Ltd (INOXCVA)

The stock had seen a very strong subscription in the IPO. The subscription was 61.28X  overall and QIB subscription was at 147.80X. In addition, the retail portion had got subscribed 15.30X in the IPO while the HNI / NII portion also got a healthy subscription of 53.20X. 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 Inox India Ltd (INOXCVA), 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 Inox India Ltd (INOXCVA) listing story on 21st December 2023.

The IPO price was fixed at the upper end of the band at ₹660 per share which was anyways along expected lines considering the relatively strong subscription in the IPO. The price band for the IPO was ₹627 to ₹660 per share. On 21st December 2023, the stock of Inox India Ltd (INOXCVA) listed on the NSE at a price of ₹949.65 per share, a strong premium of 43.89% above the IPO issue price of ₹660 per share. On the BSE also, the stock listed at ₹933.15 per share, a premium of 41.39 over the IPO issue price of ₹660 per share.

How the stock of Inox India Ltd (INOXCVA) closed on both exchanges

On the NSE, Inox India Ltd (INOXCVA) closed on 21st December 2023 at a price of ₹934 per share. That is a first day closing premium of 41.52% on the issue price of ₹660 per share. However, it marks a discount of -1.65% below the listing price of ₹949.65 per share. In fact, the listing price turned out to be closer to 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 ₹939.90 per share. That represents a first day closing premium of 42.41% above the IPO issue price of ₹660 per share. However, the closing price for the day was at a small premium of +0.72% on the listing price on the BSE at ₹933.15 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. The good thing is that in both the stock exchanges, the closing price of the stock represented a sharp bounce from the lower levels of the stock price during the day, in tandem with the bounce in the markets in the second half of the day.

Remember, that the company is subject to 20% circuit filters on both side. The upper circuit filter on the NSE was ₹1,139.55 per share while the lower circuit price on the NSE was ₹759.75 per share. In comparison, the high price of the day at ₹990 per share was much below the upper circuit price. Even the low price of the day at ₹855.10 per share was much above the lower circuit limits for the day. However, what stood out about the stock was the very sharp bounce from the lower levels of the day at close.

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 21st December 2023. On Day-1 of listing, Inox India Ltd (INOXCVA) touched a high of ₹990 per share on the NSE and a low of ₹855.10 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 stock was volatile during the day, what stood out about the performance on the exchange during the day was the sharp bounce in the stock price from lower levels. 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 ₹990 per share was well below the upper circuit price of ₹1,139.55 per share. Similarly, the Low Price of the day at ₹855.10 per share was well above the lower circuit price of ₹759.75 per share. On Day-1 of listing, the Inox India Ltd (INOXCVA) stock traded a total of 271.95 lakh shares on NSE amounting to value of ₹2,524.39 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 sell orders of on the NSE to the tune of 91,994 shares.

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 21st December 2023. On Day-1 of listing, Inox India Ltd (INOXCVA) touched a high of ₹990 per share on the BSE and a low of ₹855.20 per share. The premium to the IPO price sustained through but the premium to the listing price could not really be sustained and closed flat with marginal gains over the listing price. While the stock was volatile during the day, what stood out about the performance on the exchange during the day was the sharp bounce in the stock price from lower levels. 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 ₹990 per share was well below the upper circuit price of ₹1,119.75 per share. Similarly, the Low Price of the day at ₹855.20 per share was well above the lower circuit price of ₹746.55 per share. On Day-1 of listing, the Inox India Ltd (INOXCVA) stock traded a total of 16.45 lakh shares on BSE amounting to value of ₹152.17 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 sell orders of on the BSE for the 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. Despite the late bounce in the Nifty and the Sensex, the stock of Inox India Ltd (INOXCVA) could not sustain these gains. However, it must be said that this sharp bounce in the market also led the stock to bounce back sharply from the lower levels of the day. On the NSE, out of the total 271.95 lakh shares traded during the first day of trading, the deliverable quantity represented 96.38 lakh shares or a deliverable percentage of 38% on the NSE, which is well below the routine listing day median. That shows very low delivery action in the counter. Even on the BSE, out of the total 16.45 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 5.07 lakh shares representing total deliverable percentage of 30.79%, which is much lower than the delivery ratio on the NSE and also below the median. 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, Inox India Ltd (INOXCVA) had a market capitalization of ₹8,530.86 crore with free-float market cap of ₹1,450.25 crore. Inox India Ltd (INOXCVA) has issued capital of 907.64 lakh shares with a par value of ₹2 per share. The stocks will be held in the demat account vide ISIN Number (INE616N01034).