Plaza Wires IPO Listed at 40.74% premium, hits upper circuit

Plaza Wires IPO had a very robust listing on 12th October 2023, listing at a smart premium of 40.74%, and rallying further from the listing price to hit the 5.53% upper circuit on the day of listing. While the closing price on 12th October 2023 was above the IPO issue price for the day, it also closed comfortably above the listing price of the IPO. For the day, the Nifty closed 17 points lower while the Sensex closed a full 65 points lower. Both the Nifty and the Sensex stayed under pressure through the day and this performance by Plaza Wires Ltd on the day of listing was appreciable in the light of the weariness in the overall market indices.

IPO subscription and pricing details

The stock had seen a very strong subscription in the IPO. The subscription was 160.97X  overall and QIB subscription was at 42.84X. In addition, the retail portion had got subscribed 374.81X in the IPO while the HNI / NII portion also got a healthy subscription of 388.09X. Hence the listing was expected to be fairly strong for the day. However, while the listing was strong, the performance strength got reinforced during the trading day as the stock hit the upper circuit of 5.53% at close. Here is the Plaza Wires Ltd listing story on 12th October 2023.

The IPO price was fixed at the upper end of the band at ₹54 which was anyways along expected lines considering the relatively strong subscription in the IPO. The price band for the IPO was ₹51 to ₹54 per share. On 12th October 2023, the stock of Plaza Wires Ltd listed on the NSE at a price of ₹76, a strong premium of 40.74% over the IPO issue price of ₹54 per share. On the BSE also, the stock listed at ₹84 per share, a premium of 55.56% over the IPO issue price of ₹54 per share. This is a new trend we are seeing in mainboard IPOs wherein the listing price on NSE and BSE tend to diverge at opening, but towards the close of the day the prices do tend to converge.

How the stock of Plaza Wires IPO closed on both exchanges

On the NSE, Plaza Wires IPO closed on 12th October 2023 at a price of ₹80.20. That is a first day closing premium of 48.52% on the issue price of ₹54 and also a premium of 5.53% on the listing price of ₹76. In fact, the listing price turned out to be just above the low price of the day and the stock traded almost for the entire trading day above the opening listing price. On the BSE also, the stock closed at ₹80.23. That represents a first day closing premium of 48.57% above the IPO issue price and but a discount of -4.49% below the listing price on the BSE.

On both the exchanges, the stock listed strongly above the IPO issue price and also managed to close Day-1 well above the IPO price. The only difference is that the stock opening was much higher on the BSE as compared to the NSE, but at close both the prices converged to almost the same price, hence the net impact was the same. Normally, the mainboard IPOs are not subjected to circuit filters of 5% on the listing day. However, Plaza Wires Ltd has been admitted to the NSE in the BE category and to the BSE in the T2T category. This is the trade to trade category where only delivery trades are permitted and the mandatory circuit filter on both sides is 5%.

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 12th October 2023. On Day-1 of listing, Plaza Wires Ltd touched a high of ₹80.20 on the NSE and a low of ₹75.70. The premium to the listing price sustained through most part of the day. While the low price of the day was just below the IPO opening price, the stock of Plaza Wires Ltd closed the day exactly at the 5.53% upper circuit. Mainboard IPOs normally 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, in the case of Plaza Wires Ltd, it has been admitted to trading on the NSE under the BE category which is a trade to trade category with 5% mandatory circuit on the upside and the downside.

 If you look at the range of prices, the stock opening price turned out to be very near to the low point of the day while the closing price of the day was exactly at the upper circuit of the day for the stock.. On Day-1 of listing, the Plaza Wires Ltd stock traded a total of 46.04 lakh shares on NSE amounting to value of ₹35.65 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 buyers, with serious buying emerging towards the end. The stock closed the day with pending buy orders of 13,62,39 shares on the NSE.

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange BSE) on 12th October 2023. On Day-1 of listing, Plaza Wires Ltd touched a high of ₹84 on the BSE and a low of ₹75. The discount to the listing price sustained through most part of the day. While the low price of the day was just above the lower circuit price, the stock of Plaza Wires Ltd closed the day with losses of -4.49% on the listing price. In fact, the performance of the NSE and BSE were exact opposites, although the closing price on both exchanges almost converged. Mainboard IPOs normally 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, in the case of Plaza Wires Ltd, it has been admitted to trading on the BSE under the T2T category which is a trade to trade category with 5% mandatory circuit on the upside and the downside. If you look at the range of prices, the stock opening price turned out to be very near to the high price of the day while the closing price of the day was much lower and converged towards the NSE price. On Day-1 of listing, the Plaza Wires Ltd stock traded a total of 6.09 lakh shares on BSE amounting to value of ₹4.93 crore during the day.  The order book during the day showed a lot of back and forth with the bias in favour of the sellers, with serious selling emerging towards the end. The stock closed the day with pending sell orders on the BSE.

Market capitalization, free float, and delivery volumes

While the volumes on the BSE were not as much as on the NSE, the trend was almost the opposite. However, the prices on both the exchanges eventually converged. The order book through the day showed a mixed performance, with strength on the NSE trading and selling pressure on the BSE. The correction in the Nifty and the Sensex really did not deter the stock too much as it continued to close with strong gains over the IPO issue price. That makes it a rather attractive stock after the strong listing on Thursday. On the NSE, out of the total 46.04 lakh shares traded during the first day of trading, the deliverable quantity represented the full volume as the stock is in the Trade to Trade segment and hence only delivery volumes are permitted.

Any non-delivery volumes would be purely for small adjustments. The trend was the same on the BSE also, as there also it is in the T2T segment. 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. However, Plaza Wires being a very small sized issue and vulnerable to speculation, was only permitted to trade in the BE segment on the NSE and the T2T segment on the BSE. At the close of Day-1 of listing, Plaza Wires Ltd had a market capitalization of ₹351.02 crore with free-float market cap of ₹77.23 crore. Plaza Wires Ltd has issued capital of 437.52 lakh shares with a face value of ₹10 per share.