Mangalam Alloys IPO Lists flat, then hits lower circuit

Mangalam Alloys IPO opens flat, then hits lower circuit

Mangalam Alloys IPO had a weak listing on 04th October 2023, listing absolutely flat at the IPO price but subsequently hitting the -5% lower circuit on the listing price. Of course, the stock closed well below the IPO issue price and the IPO listing price for the day. Overall, there was a sharp fall in the markets as the Nifty closed 93 points in the red while the Sensex closed 286 points lower. The weakness in the market was largely on account of the sharp fall in the Nifty in recent days with the Nifty falling below the 19,500 support levels fairly sharply, supported by volumes. That, to some extent, had an impact on the listing day performance of Mangalam Alloys  Ltd on 04th October 2023.

With subscription of 8.73X for the retail portion, 2.41X for the HNI / NII portion; the overall subscription was extremely modest at 5.57X. The IPO was a book fixed price IPO with the IPO price fixed at ₹80 per share and being a fixed price issue, there was no question of price discovery. The stock listed absolutely flat at ₹80 per share, which is also the IPO price of the stock. That is not surprising considering that the market sentiments were extremely weak overall. However, subsequently, the stock weakened further and closed the day at the lower circuit of 5%, in line with the fall in the market overall.

Stock closes Day-1 at 5% lower circuit, after a flat start

Here is the pre-open price discovery for the Mangalam Alloys IPO on the NSE.

Data Source: NSE

The SME IPO of Mangalam Alloys Ltd was a fixed price issue and was priced at ₹80 per share. On 04th October 2023, the stock of Mangalam Alloys Ltd listed on the NSE at a price of ₹80 per share, which is a flat listing, considering that the IPO issue price was also at ₹80 per share. However, the stock took a further hit post listing and it closed the day at a price of ₹76 which is -5% below the IPO issue price of ͭ₹80 per share and also a full -5% below the listing price of the stock at ₹80 per share on the first day of listing. In a nutshell, the stock of Mangalam Alloys Ltd had closed the day exactly at the lower circuit price limit for the stock of -5% with only sellers and no buyers in the counter. 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 actually turned out to be the high price of the day, while the closing price was exactly at the low price of the day, being the -5% lower circuit limit for the day.

How prices traversed for Mangalam Alloys Ltd on listing day

On Day-1 of listing i.e., on 04th October 2023, Mangalam Alloys Ltd touched a high of ₹80 per share on the NSE and a low of ₹76 per share. The high price of the day was exactly the opening price of the stock while the stock low price of the day was exactly at the closing price of the stock for the day. The closing price of the day, or the low price of the day, also represents the lower circuit of -5%. That is the maximum that the SME IPO stock is allowed to move in the day, either ways. In fact, the stock saw a flat listing and a close at the lower circuit on a day when the Nifty was down 93 points and the Sensex was down 286 points. So, you can really not blame the stock for the fall in the day. The stock closed at the -5% lower circuit with 9,600 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.

Robust volumes for Mangalam Alloys Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Mangalam Alloys Ltd stock traded a total of 7.216 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹574.47 lakhs on the first day.  The order book during the day showed a lot of selling with the sell orders consistently exceeding the buy orders at any point of time during the day. That also led the stock to close at the lower end of the circuit filter. It must be noted here that Mangalam Alloys 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, Mangalam Alloys Ltd had a market capitalization of ₹187.61 crore with free-float market cap of ₹75.72 crore. It has a total of 246.86 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 7.216 lakh shares during the day is accounted for only by delivery trades only, barring some market very marginal trade exceptions.