Updater Services IPO Listed discount at -5%, dips further

Updater Services IPO had a forgettable listing on 04th October 2023, listing at a rather steep discount of -5.00%, and eventually closing lower than the listing price for the day. The closing price on 04th October 2023 was below the IPO issue price as well as marginally below the listing price of the day. For the day, the Nifty closed 93 points lower while the Sensex closed a full 286 points lower. Both the Nifty and the Sensex stayed under pressure through the day and this performance by Updater Services on the day of listing was appreciable in that it did not fall too sharply after listing. The Nifty had dipped below the psychological level of 19,500 for the day and that had a rub-off impact on the listing performance of Updater Services Ltd.

The stock had seen a very moderate subscription in the IPO. The subscription was 2.96X  overall and QIB subscription was at 4.50X. In addition, the retail portion had got subscribed 1.45X in the IPO while the HNI / NII portion actually got undersubscribed with demand of just 0.89X or 89% of the allocated quota. Hence the listing was expected to be modest to weak for the day. Eventually, the weakness in the market only added to the weakness in the stock of Updater Services IPO post listing. Here is the Updater Services Ltd listing story on 04th October 2023.

Updater Services IPO subscription and pricing details

The IPO price was fixed at the upper end of the band at ₹300 which was anyways along expected lines considering the issue was subscribed and the anchor allotments had been done at the upper end of the price band at ₹300 per share. The price band for the IPO was ₹280 to ₹300 per share. On 04th October 2023, the stock of Updater Services Ltd listed on the NSE at a price of ₹285, a discount of -5.00% on the IPO issue price of ₹300 per share. Interestingly, on the BSE, the stock listed at ₹299.90, a marginal discount of just -0.03% on the IPO issue price of ₹300 per share. However, as we shall see later, the stock fell sharply in the BSE later during the day, so the net impact at the end of the day was almost the same.

How the stock of Updater Services IPO closed on both exchanges

On the NSE, Updater Services IPO closed on 04th October 2023 at a price of ₹283 per share. That is a first day closing discount of -5.67% on the issue price of ₹300 and a more subdued discount of -0.70% on the listing price of ₹285 per share. In fact, the closing price turned out to be just above the low price of the day and the stock traded for the entire trading day below the IPO issue price. On the BSE also, the stock closed at ₹283.85. That represents a first day closing discount of -5.38% on the IPO issue price and also a discount of -5.35% on the listing price on the BSE. On both the exchanges, the stock listed weak below the IPO issue price and also managed to close Day-1 falling further from the listing price. The fall was much sharper post listing on the BSE as compared to the NSE. In fact, the opening price and the closing price turned out to be very near to the low price of the day on the NSE. The high price of the day was also below the IPO issue price of Rs300. As we shall see later, the high on the NSE was below the listing price on the BSE.

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 04th October 2023. On Day-1 of listing, Updater Services Ltd touched a high of ₹298.65 on the NSE and a low of ₹282. The discount 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 and the IPO closing price, the stock of Updater Services Ltd attempted and got close to the issue price of ₹300 per share, although it could not be breached. 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 also very close to the low point of the day, and during this period the stock showed a lot of volatility in the market. On Day-1 of listing, the Updater Services Ltd stock traded a total of 22.98 lakh shares on NSE amounting to value of ₹66.71 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 sellers, with some scattered buying emerging towards the end. The stock closed the day with pending buy orders of 56 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 04th October 2023. On Day-1 of listing, Updater Services Ltd touched a high of ₹299.90 on the BSE and a low of ₹282. The discount to the listing price sustained through most part of the day. While the low price of the day was just below the IPO closing price, the stock of Updater Services Ltd did attempt to open close to the issue price of ₹300 per share, but fell subsequently under selling pressure. If you look at the range of prices, the stock opening price turned out to be very near to the issue price of the stock and also the high point of the day while the closing price of the day was also very close to the low point of the day, and during this period the stock showed a lot of volatility in the market. On Day-1 of listing, the Updater Services Ltd stock traded a total of 1.86 lakh shares on NSE amounting to value of ₹5.43 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 sellers, with some scattered buying emerging towards the end. The stock closed the day with pending buy orders on the BSE also.

Market capitalization, free float, and delivery volumes

While the volumes on the BSE were not as much as on the NSE, the trend was once again the same. The order book through the day showed a lot of weakness and that almost sustained till the close of trading session. The sharp correction in the Nifty and the Sensex really did not help the stock to much as it stayed below the IPO issue price through the day. On the NSE, out of the total 22.98 lakh shares traded during the first day of trading, the deliverable quantity represented 8.96 lakh shares or a deliverable percentage of 38.99% on the NSE, which is sharply lower than the routine listing day median. That shows a lot of speculative trading action in the counter. Even on the BSE, out of the total 1.86 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 0.62 lakh shares representing total deliverable percentage of 33.19%, which is lower than the delivery ratio on the NSE; and also, much lower than the median on the BSE. 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.

At the close of Day-1 of listing, Updater Services Ltd had a market capitalization of ₹1,893.36 crore with free-float market cap of ₹397.60 crore. Updater Services Ltd has issued capital of 6.67 crore shares with a par value of ₹10 per share.