Jana Small Finance Bank IPO Lists at -4.35% discount, falls lower

Discount listing for Jana Small Finance Bank IPO

Jana Small Finance Bank IPO had a weak listing on 14th February 2024, listing at a discount of -4.35% to the issue price, and falling further form the listing price. While the closing price on 14th February 2024 was below the IPO issue price for the day, it also closed below the listing price of the IPO. On 14th February 2024, the Nifty closed 97 points higher while the Sensex closed a full 268 points higher. Both the Nifty and the Sensex stayed under pressure through the day and the Sensex and Nifty have given up a good deal of gains from the recent highs as selling pressure has picked up steam from higher levels. It is just a bit of profit related unwinding seen at higher levels.

IPO subscription and pricing details

The stock had seen a relatively modest to strong subscription in the Rashi Peripherals IPO. The subscription was 19.89X  overall and QIB subscription was at 39.81X. In addition, the retail portion had got subscribed 5.70X in the IPO while the HNI / NII portion also got a healthy subscription of 26.13X. Hence the listing was expected to be modest to strong for the day. However, the listing performance got marred by the early weakness in the market with the Nifty and the Sensex starting off under pressure, although they did manage to recoup later in the day. However, despite the volatility and subsequent bounce in the market, the stock of Jana Small Finance Bank Ltd did not lose too much of value on the listing day. Here is the Jana Small Finance Bank Ltd listing story on 14th February 2024.

The IPO price of Jana Small Finance Bank Ltd was fixed at the upper end of the band at ₹414 which was anyways along expected lines considering the relatively modest to strong subscription in the IPO. The anchor investment allocation had also happened at ₹414 per share. The price band for the IPO was ₹393 to ₹414 per share. On 14th February 2024, the stock of Jana Small Finance Bank Ltd listed on the NSE at a price of ₹396, representing a discount of -4.35% on the IPO issue price of ₹414 per share. On the BSE also, the stock listed at ₹396, a discount of -4.35% on the IPO issue price of ₹414 per share.

How the stock of Jana Small Finance Bank ,IPO closed on both exchanges

On the NSE, Jana Small Finance Bank Ltd closed on 14th February 2024 at a price of ₹367.50 per share. That is a first day closing discount of -11.23% on the issue price of ₹414 and also a discount of -7.20% on the listing price of ₹396 per share. In fact, the closing price of the day turned out to lower than the listing price of the day and the stock closed the day very near to the low price of the day. On the BSE also, the stock closed at ₹368.20. That represents a first day closing discount of -11.06% on the IPO issue price of ₹414 per share and also represents a discount of -7.02% on the listing price on the BSE of ₹396 per share. On both the exchanges, the stock listed below the IPO issue price and also lost further ground at the close of Day-1.

The opening price of the day was pretty close to the high price of the day while the closing price of the day was quite close to the low price of the day, underlining a very weak sentiment on the stock on listing day on 14th February 2024. The fall was also impacted by the fact that the markets were very volatile on the NSE and on the BSE during early part of the day. The high price and the low price did betray a lot of volatility in the stock price, although both these prices were well away from the 20% circuit filters applicable to the stock of Jana Small Finance Bank Ltd on the day of listing i.e., 14th February 2024.

Price volume story of Jana Small Finance Bank IPO on 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 14th February 2024. On Day-1 of listing, Jana Small Finance Bank Ltd touched a high of ₹409 on the NSE and a low of ₹365 per share. The discount to the listing price sustained through most part of the day while the stock never went even close to the IPO issue price at any point during the trading session. The high and low price range does tell a lot about the volatility during the day, although the prices stayed well clear of the circuit filters. Mainboard IPOs do not have an upper or lower circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment.

However, the stock of Jana Small Finance Bank Ltd was subjected to 20% circuit filter on either side of the listing price. That translated into an upper circuit price of Jana Small Finance Bank Ltd on the NSE at ₹475.20 and a lower circuit price of the stock at  ₹316.80 per share. On the NSE, the high price of the day at ₹409 was well short of the upper circuit price of ₹475.20 while the low price of the day at ₹365 was also well above the lower circuit price of ₹316.80. On Day-1 of listing, the Jana Small Finance Bank Ltd stock traded a total of 55.74 lakh shares on NSE amounting to value of ₹217.20 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 some late buying emerging towards the end of the trading session. In fact, the stock closed the day with pending buy orders of 8,311 shares on the NSE.

Price volume story of Jana Small Finance Bank IPO on BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 14th February 2024. On Day-1 of listing, Jana Small Finance Bank Ltd touched a high of ₹408.80 on the BSE and a low of ₹365 per share. The discount to the listing price sustained through most part of the day while the stock never went even close to the IPO issue price at any point during the trading session. The high and low price range does tell a lot about the volatility during the day, although the prices stayed well clear of the circuit filters. Mainboard IPOs do not have an upper or lower circuit of 5%, unlike SME IPOs since they trade in the normal equity segment and not in the trade to trade segment.

However, the stock of Jana Small Finance Bank Ltd was subjected to 20% circuit filter on either side of the listing price. That translated into an upper circuit price of Jana Small Finance Bank Ltd on the BSE at ₹441.80 and a lower circuit price of the stock at  ₹294.60 per share. On the BSE, the high price of the day at ₹408.80 was well short of the upper circuit price of ₹441.80 while the low price of the day at ₹365 was also well above the lower circuit price of ₹294.60. On Day-1 of listing, the Jana Small Finance Bank Ltd stock traded a total of 2.95 lakh shares on BSE amounting to value of ₹11.54 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 some late buying emerging towards the end of the trading session. In fact, the stock closed the day with pending buy orders on the BSE also.

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 selling with buying emerging in the final part of the trading session. The sharp correction in the Nifty and the Sensex in the early part of the session influenced the stock and the stock was not really influenced by the late bounce in the indices during the day. That makes it a rather attractive stock after being able to hold its own on a tough listing day. On the NSE, out of the total 55.74 lakh shares traded during the first day of trading, the deliverable quantity represented 31.95 lakh shares or a deliverable percentage of 57.31% on the NSE, which is higher than the routine listing day median on the NSE.

That shows a fair level of balance between delivery action and speculative action on the counter. Even on the BSE, out of the total 2.95 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 1.19 lakh shares representing total deliverable percentage of 40.15%, which is 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, Jana Small Finance Bank Ltd had a market capitalization of ₹3,851.01 crore with free-float market cap of ₹616.16 crore. Jana Small Finance Bank Ltd has issued capital of 1,045.90 lack shares with a face value of ₹10 per share. The stock trades on the NSE main segment under the trading code (JSFB), traded on the BSE main segment under the code (544118) and will be available in the demat account under ISIN code (INE953L01027).

IPO size to Market cap contribution ratio

One way to assess the significance of the IPO on the market cap of the segment is the ratio of market capitalization overall to the IPO size. Jana Small Finance Bank Ltd had a market cap of ₹3,851.01.74 crore and the issue size was ₹570 crore. Therefore, the Market cap contribution ratio of the IPO works out to 6.76 times; which is relatively high for a mainboard IPO. Remember, this is not the ratio of the market cap to original book value, but the ratio of the market cap created to the size of the IPO. That shows the significance of the IPO to the overall market cap accretion of the stock exchange.