MCON Rasayan IPO Listing lists at 20% premium, gains further

MCON Rasayan India IPO had a strong listing on 20th March 2023, listing at a sharp premium of 20%, but subsequently bounced and closed much above the listing price at the close of trading. In a sense, the markets came under pressure as the Nifty slipped below the psychological 17,000 mark, but the stock of MCON Rasayan India Ltd managed to hold on and closed with smart gains for the listing day. For now, the headwinds like the inversion of the yield curve, the negative news flows on banks and the SVB Financial crisis are the major talking points and continue to keep the markets under pressure. To add to that, the UBS Credit Suisse merger also weighed on the markets on 20th March 2023, but the stock of MCON Rasayan India Ltd managed to hold on for the day quite strong.

The stock of MCON Rasayan India Ltd did show a lot of strength during the day, and closed above the listing price as well as the issue price on the first day of trading on the NSE. Being an NSE SME IPO, it is only traded on the SME segment of NSE. MCON Rasayan India Ltd opened 20% higher and the opening price turned out to be the low price for the day. With subscription of 403.41X for the retail portion and 307.09X for the HNI / NII portion; the overall subscription was quite healthy at 384.64X. The subscription numbers were so strong that it allowed the stock to list at a huge premium and then sustain the premium post listing.

MCON Rasayan India IPO was priced at Rs. 40 via fixed price format. On 20th March 2023, the stock of MCON Rasayan India IPO listed on the NSE at a price of Rs. 48, a premium of 20% on the IPO issue price of Rs. 40. However, the stock bounced sharply from lower levels and it closed the day at a price of Rs. 50.40, which is 26% above the IPO price and 5% above the listing price of the stock on the first day of listing. In a nutshell, the stock of MCON Rasayan had closed the day exactly at the upper circuit price for the stock of 5% with only buyers and no sellers. The upper 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 low price of the day.

On Day-1 of listing i.e., on 20th March 2023, MCON Rasayan India Ltd touched a high of Rs. 50.40 on the NSE and a low of Rs. 48 per share. The opening price turned out to be the low point while the stock closed at the high point of the day. Incidentally, the closing price also represented the 5% upper circuit price of the stock for the day, which is the maximum that the SME IPO stock is allowed to move in the day. What is truly appreciable is that the stock closed strong despite the overall Nifty falling by over 111 points on 20th March 2023 and dipping below the psychological level of 17,000 on a closing basis for the listing day. The stock closed at the 5% upper circuit with 24,000 buy quantity and no sellers. For the SME IPOs, 5% is the upper limit over the listing price on the day of listing.

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the MCON Rasayan India Ltd stock traded a total of 9.60 lakh shares on NSE SME segment amounting to value of Rs. 480.86 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 helped the stock to close at the upper end of the circuit filter. It must be noted here that MCON Rasayan India 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, MCON Rasayan India Ltd had a market capitalization of Rs. 31.77 crore with free-float market cap of Rs. 8.58 crore. It has a total of 63.04 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 9.60 lakh shares during the day is accounted for only by delivery trades.

MCON Rasayan India Ltd is a 7-year-old company based in Mumbai with manufacturing facilities in Gujarat. MCON Rasayan India Ltd is into the manufacture and marketing of modern building material and construction chemicals; selling the construction chemicals in powder form and in liquid form. It offers over 80 products in its portfolio. Its powder products are essentially in the form of ready-mix plaster, tile adhesives, block adhesives, wall putty, polymer mortar and micro concrete; apart from floor hardeners. Its liquid form products include polyurethane based liquid membrane, bonding agents, anti-corrosive coatings, paints and curing compounds.

MCON is the brand name under which its products are marketed in India and globally. It has manufacturing plants located at Valsad and Navsari, both in south Gujarat. The Valsad plant has installed capacity of 2,500 metric tonnes per annum (MTPA), while the Navsari plant has installed capacity of 12,500 MTPA. Its client base is focused on the construction and real estate development sector with some of the marquee clients of the company including Runwal group, Lodha group, Rustomjee group, DB Realty, and Indian Railways. MCON Rasayan India Ltd markets its products through a network of over 400 retailers in Mumbai with active project supplies to more than 200 projects.