Supreme Power Equipment Lists 50.77% higher, hits upper circuit

Smart listing for Supreme Power Equipment Ltd, then upper circuit

Supreme Power Equipment IPO had a very strong listing on 29th December 2023, listing at a premium of 50.77%. After a strong  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 29th December 2023. What also stood out about the stock was the bumper listing despite the absence of market support. In fact, on the day, the Nifty was down by 47 point and the Sensex was lower by 170 points. In the last few days, the Nifty has been volatile but has managed to hold the 21,700 mark during the week and that is what matters to the market. Markets corrected after a string of positive trading days as there was weekend selling and also year-end selling in the markets as people were generally turning slightly cautious after the big rally in the markets.

Subscription and price performance of Supreme Power Equipment Ltd on listing day

Let us now turn to the subscription story of Supreme Power Equipment IPO. With hefty subscription of 264.48X for the retail portion, 88.98X for the QIB portion, and 489.10X for the HNI / NII portion; the overall subscription was extremely healthy at 262.60X. The IPO was a book built IPO issue with the IPO price brand in the range of ₹61 to ₹65 per share. Thanks to the robust response to the IPO, the stock price for the IPO got discovered at the upper band of ₹65 per share. The stock listed at a strongly positive premium of 50.77% 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 improving market sentiments. The subscription normally impacts the price discovery in book building issues and the listing price. The strong subscription had a positive impact on the ability of the stock  in two ways. Firstly, it led to the stock price getting discovered at the upper end of the band at ₹65 per share and secondly on the day of listing, the stock managed to hold gains and close at the upper circuit for the day in a volatile market, despite a very strong listing at the start of the listing day.

Stock closes Day-1 at upper circuit, after a very strong start

Here is the pre-open price discovery for the SME IPO of Supreme Power Equipment Ltd on the NSE.

Data Source: NSE

The SME IPO of Supreme Power Equipment Ltd was priced at ₹65 per share, being the upper end of the book building price band. On 29th December 2023, the stock of Supreme Power Equipment Ltd listed on the NSE at a price of ₹98.00, a premium of 50.77% over the IPO issue price of ₹65. However, despite a volatile day post listing on 29th December 2023, the stock of Supreme Power Equipment Ltd closed exactly at the upper circuit price of ₹102.90 per share. The stock had an upper circuit limit of ₹102.90 for the day and a lower circuit limit of ₹93.10 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. However, it also got close to the lower circuit in the day before bouncing back sharply. The closing price reflects a strong day of trading, because it closed at the upper circuit despite approaching near the lower circuit briefly, with the low price of the day slightly above the lower circuit price limit. Also, the upper circuit comes on top of a 50.77% premium listing of the stock, which is all the more appreciable, considering that the Nifty and the Sensex had actively been negative on the day of listing of Supreme Power Equipment Ltd.

Being an SME IPO on the NSE, the stock of Supreme Power Equipment 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 above the low price of the day, meaning the stock only briefly 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 dipped below the listing price but did not touch the lower circuit. On the NSE, the stock of Supreme Power Equipment 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. This rules out any speculative intraday trading on the day of listing.

How prices traversed for Supreme Power Equipment Ltd on listing day

On Day-1 of listing i.e., on 29th December 2023, Supreme Power Equipment Ltd touched a high of ₹102.90 per share on the NSE and a low of ₹95.00 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 slightly above the lower circuit of the stock, showing a lot of volatility in 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 by 47 points and the Sensex correcting by 170 points during the day.

During the trading day, the stock did actually fall below the listing price of ₹98 per share, and also briefly got close to the lower circuit price of ₹93.10 per share, although it quickly bounced and got locked into the upper circuit price of the day. In terms of the circuit filter limits, the stock of Supreme Power Equipment Ltd had an upper circuit filter limit of ₹102.90 and a lower circuit band limit of ₹93.10. The stock closed the day 58.31% above the IPO issue price of ₹65 per share and it also closed 5% above the listing price of the day at ₹98.00 per share. During the day, the stock of Supreme Power Equipment Ltd hit the upper circuit and stayed locked in the upper circuit for most part of the day. However, it also got very close to the lower circuit price of the day. The stock closed strong at the upper circuit at the close of the day with 96,000 buy quantity 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 on the day of listing.

Robust volumes for Supreme Power Equipment Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Supreme Power Equipment Ltd stock traded a total of 29.30 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹2,920.62 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 at the end of the trading session, although the price was hardly volatile during the day. It must be noted here that Supreme Power Equipment 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, Supreme Power Equipment Ltd had a market capitalization of ₹257.16 crore with free-float market cap of ₹109.19 crore. It has a total of 249.91 lakh shares as the issued capital of the company with a face value of Rs10 per share. As stated earlier, since the trading is on the T2T segment, the entire volume of 29.30 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 (SUPREMEPWR) and will be available in the demat account under ISIN code (INE0QHG01026).