Aatmaj Healthcare IPO lists 6.67% lower and falls further

Aatmaj Healthcare Ltd had a tepid listing on 30th June 2023, around 6.67% below the issue price but closing a full 11.33% lower for the day compared to the IPO issue price. It was rather ironic because the stock had a weak listing on a day when the markets were exceptionally buoyant. For a long time, the Nifty had struggled to breach above the 19,000 mark. However, on 30th June 2023, the Nifty not only opened above the 19,000 mark but it closed very near to the 19,200 mark, gaining a full 217 points in the day.

The markets were buoyed by factors like the reducing hawkishness of the US Federal Reserve, the RBI keeping rates on pause, sharply lower inflation, better growth, and a current account deficit that was just 0.2% of GDP in the fourth quarter. Above all, the news of the HDFC merger going through in July also helped markets scale higher levels as it would be positive for a number of large companies in terms of additional flows. Despite the positivity in the market on 30th June 2023, the stock of Aatmaj Healthcare IPO listed in an extremely tepid fashion, and only weakened further through the day.

The stock of Aatmaj Healthcare Ltd hardly showed any  strength during the day, and closed below the listing price as well as the issue price on the first day of trading on the NSE. It had opened for trade exactly about 6.67% below the IPO price. Being an NSE SME IPO, it is only traded on the SME segment of NSE. Aatmaj Healthcare Ltd opened lower ₹56 (compared to the IPO issue price of ₹60) but then consistently drifted lower before closing at the 5% lower circuit for the day. With subscription of 30.27X for the retail portion and 36.78X for the HNI / NII portion; the overall subscription was actually attractive at 33.6X. The subscription numbers, however, did not set the counter on fire, despite being very healthy and also the day being an extremely bullish day for the NSE.

The SME IPO of Aatmaj Healthcare Ltd was priced at ₹60 via fixed price format. On 30th June 2023, the stock of Aatmaj Healthcare Ltd listed on the NSE SME segment at a price of ₹56, which is 6.67% lower than the IPO issue price. However, through the day, the stock never bounced from these levels but only drifted lower. The opening price of ₹56 also turned out to be the high price of the day and it drifted lower for the day. Eventually, the stock closed at the lower 5% circuit for the day vis-à-vis the opening price.

On Day-1 of listing i.e., on 30th June 2023, Aatmaj Healthcare Ltd touched a high of ₹56 on the NSE and a low of ₹53.20 per share. The opening price turned out to be the high point while the stock closed at the low point of the day. Incidentally, the closing price also represented the 5% lower circuit price of the stock for the day, which is the maximum that the SME IPO stock is allowed to move on the day of listing. What is surprising is that the stock showed weakness on a day when the Nifty was sharply higher by 217 points and had broken through some importance resistance levels apart from touching life-time highs. The stock closed at the 5% lower circuit with 16,000 sell quantity and no buyers. For the SME IPOs, 5% is the lower limit over the listing price on the day of listing.

Let us now turn to the volumes of the stock on the NSE SME IPO segment. On Day-1 of listing, the Aatmaj Healthcare Ltd stock traded a total of 17,90,000 shares on NSE SME segment amounting to value of ₹1,000.07 lakhs on the first day.  The order book during the day showed a lot of selling with the sell orders consistently exceeding the buy orders at any point of time. That also pushed the stock to close at the lower end of the circuit filter. It must be noted here that Aatmaj Healthcare 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 of 17.90 lakh shares as reported on the NSE SME segment purely represents the delivery volumes.

At the close of Day-1 of listing, Aatmaj Healthcare Ltd had a market capitalization of ₹120.23 crore with free-float market cap of ₹43.62 crore. It has a total of 226.00 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 17.90 lakh shares during the day is accounted for only by delivery trades. The table below shows the NSE pre-open price for Aatmaj Healthcare Ltd.

Data Source: NSE

Let us now quickly understand the business model of Aatmaj Healthcare Ltd. Aatmaj Healthcare Ltd, is an SME IPO on the NSE which opened for subscription on 19th June 2023. The company, Aatmaj Healthcare Ltd, was incorporated in 2014 and it runs multi-specialty hospitals under the brand name of Jupiter Hospitals with predominant focus on Gujarat. The intent of the hospital is to provide quality healthcare at affordable rates and it currently provides in-patient and outpatient healthcare services through its network in Gujarat. It has an aggregate bed capacity of 130 beds, extendable to 175 beds. It has treated more than 17,000 patients till date, which includes more than 13,000 OPD patients.

The company provides a complete suite of check-ups including haemoglobin check, lipid profile check, renal profile, blood sugar, ESR, MCH etc. It also does more complex profiles like the liver profiles. In addition, the hospital also specializes in nephrology, uro-surgery, and vascular surgery.  On the orthopaedics front, the hospital handles joint replacement surgery, post trauma care; apart from obstetrics, gynaecology and neuro and plastic surgery. It is overall a multi-speciality offering with an economical price point.