Kalahridhaan Trends IPO Lists 4.78% higher, hits upper circuit

Strong listing for Kalahridhaan Trendz IPO, then upper circuit

Kalahridhaan Trendz IPO had a modest listing on 23rd February 2024, listing at a premium of 4.78%. After a modest opening, the stock closed the day at the 5% upper circuit over the listing price. For the day, the stock closed comfortably above the IPO issue price and the IPO listing price at the close of trading on 23rd February 2024. What also stood out about the stock was the modest listing and positive close despite the absence of market support. In fact, on the day, the Nifty had shown a small correction of -5 point and the Sensex was lower by -15 points. In the last few days, the Nifty has been volatile but has managed to hold the 22,200 mark during the week and that is what matters to the market.

However, markets did show some signs of weakness, or rather tiring out at higher levels, today as traders rushed to book profits ahead of the weekend. Markets corrected after a string of positive trading days, but it was a marginal correction, although the indices were fairly volatile during the day. Investors are generally turning slightly cautious after the big rally in the markets, especially the frenetic rally over the last quarter of 2024. Also, there are big data points coming up next week like the GDP data, the core sector data as well as the US GDP and the US PCE inflation in the coming week.

Subscription and price performance of Kalahridhaan Trendz IPO on listing day

Let us now turn to the subscription story of Kalahridhaan Trendz IPO. With modest subscription of 9.63X for the retail portion, and 6.66X for the HNI / NII portion; the overall subscription was modest at 8.15X. The IPO was a fixed price IPO issue with the IPO price set at ₹45  per share. Being a fixed price issue, there was really not question of price discovery in the IPO. The stock listed at a strong premium of 4.78% on the NSE SME segment.

However, subsequently, despite the stock seeing some volatility in the early parts of the day, it went on to close at the upper circuit of 5% over the listing price. This was reflective of strength in the stock amidst the volatile market sentiments. The subscription normally impacts the price discovery in book building issues and the listing price. In this case, being a fixed price issue, there was obviously no scope for any impact on the price discovery. However, the subscription levels did impact the listing price and the closing price. Firstly, it led to the stock price listing at a modest premium to the issue price. Secondly, despite the marginal pressure on the overall market, the stock managed to close at the 5% upper circuit for the day, which is a sign of inherent strength in the stock.

Stock closes Day-1 at upper circuit, after a modest to strong listing start

Here is the pre-open price discovery for the SME IPO of Kalahridhaan Trendz IPO on the NSE.

Data Source: NSE

The SME IPO of Kalahridhaan Trendz IPO was a fixed price IPO and priced at ₹45 per share, as the fixed price of the IPO. On 23rd February 2024, the stock of Kalahridhaan Trendz Ltd listed on the NSE at a price of ₹47.15 per share, a premium of 4.78% over the IPO issue price of ₹45. However, despite a volatile day post listing on 23rd February 2024, the stock of Kalahridhaan Trendz Ltd closed exactly at the upper circuit price of ₹49.50 per share on the NSE SME segment. The stock had an upper circuit limit of ₹49.50 for the day and a lower circuit limit of ₹44.80 per share for the day. In the midst of the volatility in trading during the day, the stock hit the upper circuit but stayed put at the upper circuit price for the better part of the day, and never really went below the listing price.

Despite the volatility in the stock price, it never really went below the listing price of the day, which was also the low price of the day at ₹47.15 per share. The stock was, obviously, quite far away from the lower circuit price of the day at ₹44.80 per share. The stock showed a smart bounce from listing levels as it spent better part of the day locked in upper circuit. The closing price reflects a strong day of trading, because it closed at the upper circuit and never went below the listing price, and it remained well above the lower circuit limit for the day. Also, the upper circuit comes on top of an 4.78% premium listing of the stock, which is all the more appreciable, considering that the Nifty and the Sensex had marginally been negative on the day of listing of Kalahridhaan Trendz Ltd. The Nifty had lost -5 points while Sensex was down -15 points on the day. Overall, the closing price of the stock of Kalahridhaan Trendz Ltd was a full 10% above the issue price at the close of the first day of the stock listing on the NSE SME segment.

Listed in the ST segment for trade in T2T

Being an SME IPO on the NSE, the stock of Kalahridhaan Trendz 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 exactly at the low price of the day, meaning the stock never really dipped below the listing price and spent most part of the day at the upper circuit, locked in.

During the day, the stock hit the upper circuit but stayed well above the lower circuit but the close was exactly at the upper circuit price. In fact, the stock never went below the listing price and stayed well above the lower circuit price of the day. On the NSE, the stock of Kalahridhaan Trendz 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 Kalahridhaan Trendz IPO on listing day

On Day-1 of listing i.e., on 23rd February 2024, Kalahridhaan Trendz Ltd touched a high of ₹49.50 per share on the NSE and a low of ₹47.15 per share. The high price of the day was exactly the upper circuit limit price of the stock while the stock low price of the day was exactly at the listing price of the day. Between these two extreme prices, the stock was relatively less volatile and eventually closed at the upper circuit price of the day. In fact, the stock can be said to have enjoyed a strong listing and despite the Nifty correcting marginally by -5 points and the Sensex correcting by -15 points during the day. The stock of Kalahridhaan Trendz Ltd closed at 5% upper circuit on top of a premium listing on the NSE.

During the trading day, the stock never really went below the listing price of ₹47.15 per share, which was the low price of the day and stayed well clear of the lower circuit price of ₹44.80 per share. The stock quickly bounced and got locked into the upper circuit price of the day. In terms of the circuit filter limits, the stock of Kalahridhaan Trendz Ltd had an upper circuit filter limit of ₹49.50 and a lower circuit band limit of ₹44.80. The stock closed the day 10% above the IPO issue price of ₹45 per share and it also closed 5% above the listing price of the day at ₹47.15 per share. During the day, the stock of Kalahridhaan Trendz Ltd hit the upper circuit and stayed locked in the upper circuit for most part of the day. However, it never really dipped below the listing price and so, obviously stayed well above the lower circuit price of the day. The stock closed strong at the upper circuit at the close of the day with unmet buy quantity of 1,32,000 shares and no sellers 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.

Robust volumes for Kalahridhaan Trendz IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Kalahridhaan Trendz Ltd stock traded a total of 25.29 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹1,220.50 lakhs on the first day. The order book during the day showed a lot of buying with the buy orders consistently exceeding the sell orders at any point of time. That also led the stock to close with pending buy orders of 1,32,000 shares (unmet) at the end of the trading session, although the price was hardly volatile during the day. It must be noted here that Kalahridhaan Trendz 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, Kalahridhaan Trendz Ltd had a market capitalization of ₹85.08 crore with free-float market cap of ₹27.02 crore. It has a total of 171.87 lakh shares as the issued capital of the company with a face value of ₹10 per share. As stated earlier, since the trading is on the T2T segment, the entire volume of 25.29 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 (KTL) and will be available in the demat account under ISIN code (INE02M801018).

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 overall to the IPO size. Kalahridhaan Trendz Ltd had a market cap of ₹85.08 crore and the issue size was ₹22.49 crore. Therefore, the Market cap contribution ratio of the IPO works out to 3.78 times; which is lower than the median. 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.