TBO Tek IPO Listed 55% Higher; then Closes Flat

TBO Tek IPO opens strong, but closes flat

TBO Tek Ltd had a strong listing on 15th May 2024, listing on the NSE at a robust premium of 55% to the issue price, but managed to close almost flat for the day, post listing. The stock of TBO Tek Ltd closed the day at ₹1,404 per share, a small discount of -1.54% on the listing price of ₹1,426 per share but closed at a premium of 52.61% over the IPO issue price of ₹920 per share. The IPO allottees of TBO Tek Ltd would still be pleased at the way the stock managed to open strong and held on for the day, despite the flat to negative vibes from the Nifty and the Sensex during the day of listing.

The pattern was largely similar on the BSE also, with the stock opening at a strong premium and then rallying tad further during the day. On the Bombay Stock Exchange (BSE), the stock of TBO Tek Ltd listed at ₹1,380 per share, a strong premium of 50% on the IPO issue price of ₹920 per share. For the day, the stock closed on the BSE at ₹1404.85, an overall premium of 1.80% on the IPO listing price of ₹1,380 per share and also a premium of 52.7% over the issue price of ₹920 per share.  On the NSE, the stock of TBO Tek Ltd closed the listing day well below high price of the day and well above the low price of the day. On the BSE also, the stock of TBO Tek Ltd displayed a similar post listing trend.

Stock gains amidst volatility in the frontline indices

While the closing price of TBO Tek IPO on 15th May 2024 was above the IPO issue price on both the stock exchanges, it stayed well below the upper circuit at the close on NSE and BSE. What is more interesting is that on both the stock exchanges, the stock of TBO Tek Ltd closed well above the issue price and the lower price of the day. What is more gratifying about the performance is that the strong close on the NSE and the BSE came on a day when there was volatility driven selling on the NSE and the BSE.

On 15th May 2024, the Nifty closed -17 points lower while the Sensex closed -118 points lower. On both the exchanges, it was more an example of the indices seeing a sell-off by the traders from higher levels and the high levels of the VIX preventing the indices from sustaining higher levels at close. The negative sentiments were triggered by several factors like the persistent FPI selling, the higher than expected VIX (that has stayed above the 20 mark for some time now), the ongoing crisis in the Red Sea and West Asia, as well as the Q4 results doing better on sales, but faltering on net profits. There is also the political uncertainty ahead of the electoral outcome on June 04, 2024.

IPO subscription and pricing details

The stock had reported strong subscription in the IPO. The subscription was 86.69X  overall and QIB subscription was at 125.51X. In addition, the retail portion had got subscribed 25.72X in the IPO while the HNI / NII portion actually got subscribed 50.60X. Hence the listing was expected to be relatively positive. However, while the listing was strong, the close was largely flat and it closed fairly close to the listing price of the day. At the close, the stock managed to close well above the IPO price. However, while the close was below the listing price on the NSE, it was above the listing price on the BSE. However, such gaps were very marginal, and you can call it a flat closing on the listing day on 15th May 2024.

The IPO price was fixed at the upper end of the band at ₹920 per share which was anyways along expected lines considering the full subscription in the IPO and the fact that the anchor allocation had also been done at the upper band price. The price band for the IPO was ₹875 to ₹920 per share. On 15th May 2024, the stock of TBO Tek Ltd listed on the NSE at a price of ₹1426 per share, a premium of 55% over the IPO issue price of ₹920 per share. On the BSE also, the stock listed at ₹1,380 per share, a premium of 50% on the IPO issue price of ₹920 per share. Here is the TBO Tek Ltd listing story on 15th May 2024.

How the stock of TBO Tek IPO closed on both exchanges?

On the NSE, TBO Tek Ltd closed on 15th May 2024 at a price of ₹1,404 per share. That is a first day closing premium of 52.61% on the issue price of ₹920 but a marginal discount of -1.54% on the listing price of ₹1,426 per share. In fact, the listing price turned out to be the mid-point price of the day with the stock gyrating above and well below the listing price, although it steered well clear of the upper and lower circuits. On the BSE also, the stock closed at ₹1404.85 per share. That represents a first day closing premium of 52.70% above the IPO issue price of ₹920 per share and a premium of 1.80% above BSE listing price of ₹1,380 per share.

On both the exchanges, the stock strong with solid gains on 15th May 2024, but managed to close Day-1 on a flat note. There are some key points to note here. Normally, the mainboard IPOs have a circuit filter of 20% either ways; and in the case of TBO Tek Ltd, the circuit filter was set at 20% either ways. The stock gyrated between the upper and lower circuits on both the stock exchanges, although it never got quite close to the circuits. The stock traded on the NSE and the BSE in the normal segment with rolling settlement cycle. On the NSE, the stock closed with open unmet selling quantity of 4,150 shares, although much cannot be read into such a small quantity of shares. Similar sentiments were echoed on the BSE trading patterns also.

Price volume story of TBO Tek IPO 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 15th May 2024. On Day-1 of listing, TBO Tek Ltd touched a high of ₹1,455.95 per share on the NSE and a low of ₹1,275.00 per share. The premium to the listing price sustained through most part of the day. For the day, on the NSE, the upper circuit price was ₹1,711.20 per share while the lower circuit price was ₹1,140.80 per share. During the day, the high price of the day at ₹1,455.95 was much lower than the upper band price of ₹1,711.20 per share while the low price of the day at ₹1,275 per share was sharply above the lower band price for the day at ₹1,140.80 per share.

In fact, the stock did show a tendency to move well above the listing price and well below the listing price too. However, on the NSE, the stock stopped well short of the upper circuit on the upside and also well short of the lower circuit on the downside. On Day-1 of listing, the TBO Tek Ltd stock traded a total of 120.03 lakh shares on NSE amounting to value of ₹1,670.37 crore (traded turnover) 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 for a better part of the trading day. The stock closed the day with pending sell orders of 4,150 shares on the NSE, although the selling quantity is too small to give any time of indications to the market.

Price volume story of TBO Tek IPO on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 15th May 2024. On Day-1 of listing, TBO Tek Ltd touched a high of ₹1,455.95 per share on the BSE and a low of ₹1,275.00 per share. The premium to the listing price sustained through most part of the day. For the day, on the BSE, the upper circuit price was ₹1,655.95 per share while the lower circuit price was ₹1,104.00 per share. During the day, the high price of the day at ₹1,455.95 was much lower than the upper band price of ₹1,655.95 per share while the low price of the day at ₹1,275 per share was sharply above the lower band price for the day at ₹1,104.00 per share.

In fact, the stock did show a tendency to move well above the listing price and well below the listing price too. However, on the BSE, the also stock stopped well short of the upper circuit on the upside and also well short of the lower circuit on the downside. On Day-1 of listing, the TBO Tek Ltd stock traded a total of 6.89 lakh shares on BSE amounting to value of ₹94.81 crore (traded turnover) 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 for a better part of the trading day. The stock closed the day with pending sell orders on the BSE, although the selling quantity is too small to give any time of indications to the market.

 Market capitalization, free float, and delivery volumes

Volumes on the BSE were generally lower than on the NSE, but the trend was once again the same. The order book through the day showed a lot of strength and that almost sustained till the close of trading session, with some hints of offloading in the first half of the trading session. The sharp volatility in the Nifty and the Sensex did not really deter the stock of TBO Tek Ltd from closing strong on both exchanges. That makes it a rather attractive stock after the strong listing on Wednesday and its ability to sustain gains on a tough trading day. On the NSE, out of the total 120.03 lakh shares traded during the first day of trading, the deliverable quantity represented 72.20 lakh shares or a deliverable percentage of 60.15% on the NSE. This is well above the median delivery percentage that IPOs see on the NSE on listing day.

Even on the BSE, out of the total 6.89 lakh shares of quantity traded, the delivery volumes stood at 3.23 lakh shares. In percentage terms, this translates into a delivery percentage of 46.79%. This is not only lower than the delivery percentage on the NSE but also lower than the median on the BSE, indicating that the delivery volumes were relatively lower on the counter on the BSE, and indicating a higher proportion of intraday volumes on the stock exchange. Being a normal rolling settlement stock, even on listing day, delivery and intraday trades are permitted on the counter.

At the close of Day-1 of listing, TBO Tek Ltd had a market capitalization of ₹15,254.96 crore with free-float market cap of ₹1,372.95 crore. TBO Tek Ltd shares have a par value of ₹1 per share. The ratio of market cap to issue size (a sign of market liquidity creation) was 9.84X. The company trades under the code (TBOTEK) on the NSE, (544174) on the BSE and is held in the demat account under ISIN (INE673O01025).