AG Universal IPO lists at par, but closes higher

AG Universal IPO had a flat listing on 24th April 2023, listing exactly at the issue price, but subsequently bounced and closed above the listing price at the close of trading. In a sense, the markets did extremely well on Monday as the Nifty gained 119 points to get close to the 17,750 level. However, the stock of AG Universal Ltd managed to list flat and then close marginally higher than the listing price and the issue price of the IPO on the day of listing. For now, the headwinds like the inversion of the yield curve, the negative news flows on banks and the SVB Financial crisis are the major talking points and continue to keep the markets under pressure. To add to that, the UBS Credit Suisse merger also weighed on the markets on 24th April 2023, but the stock of AG Universal Ltd managed to hold on with a higher close despite opening on an absolutely flat note.

Out of the 14.54 lakh shares issued in the IPO, the company had set aside 74,000 shares for market making. The issue is equally divided between the retail and the HNI / NII investors. Promoters held 95.53% of the equity of the company prior to the issue and post the issue that share gets diluted to 70.20%. In terms of financial highlights, AG Universal Ltd has issued shares in the IPO at a P/E of 3.12X with ROE of 39.79% and ROCE of 13.49%.

The stock of AG Universal Ltd displayed a gradual build-up of strength during the day, and closed marginally above the listing price as well as the issue price on the first day of trading on the NSE. Being an NSE SME IPO, it is only traded on the SME segment of NSE. AG Universal Ltd opened absolutely flat at the issue price but the stock did show strength towards the latter part of the day and closed with gains, rallying sharply from lower levels. With subscription of 2.54X for the retail portion and 3.71X for the HNI / NII portion; the overall subscription was almost moderate at 3.36X. The subscription numbers were moderate so a very moderate listing is what was expected. However, it allowed the stock to close the day at a premium, despite a very flat listing on 24th April 2023.

The SME IPO of AG Universal Ltd was priced at Rs60 via fixed price format. On 24th April 2023, the stock of AG Universal Ltd listed flat on the NSE exactly at the IPO price of Rs60, so there was neither a premium nor a discount to the issue price. However, the stock was volatile during the day but showed strength in the second half. It bounced sharply from lower levels and it closed the day at a price of Rs61.50, which is 2.50% above the IPO price and also 2.50% above the listing price of the stock on the first day of listing. In a nutshell, the stock of AG Universal Ltd had closed the day with smart gains despite a very volatile day and a weak opening. It must be said that the stock did show signs of strength in the way it bounced from lower levels to close about 2.5% higher for the day. There were no price bands defined for the stock on the day, although hit started on the T2T list.

On Day-1 of listing i.e., on 24th April 2023, the stock of AG Universal Ltd touched a high of Rs61.50 on the NSE and a low of Rs57.25 per share. The opening price turned out to be the IPO price but later the stock did dip lower due to volatility but later bounced back to close above the listing price. Incidentally, the closing price was 2.5% above the issue price and the listing price for 24th April 2023. What is truly appreciable is that the stock closed strong despite the volatility during the day on 24th April 2023 and dipping below the issue price at several points in the day. The stock closed 2.5% higher on the day, showing good deal of strength in a volatile day.

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the AG Universal Ltd stock traded a total of 4.68 lakh shares on NSE SME segment amounting to value of Rs278.83 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 helped the stock to close above the issue price and the listing price of the day. It must be noted here that AG Universal 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, AG Universal Ltd had a market capitalization of Rs33.73 crore. It has a total of 54.84 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of trading during the day is accounted for only by delivery trades.

AG Universal Ltd, is an SME IPO on the NSE which opened for subscription on 11th April 2023 and closed for subscription on 13th April 2023. The company, AG Universal Ltd, was incorporated in the year 2008 and is currently positioned as a leading supplier of industrial MS Tubes, GI Pipes and Hollow Sections. In terms of sectoral classification, it is in the steel and metal tubes industry. It has a wide portfolio of products including stainless steel pipes, mild steel pipes, ERW Black Pipes, TMT Bars, wire rods, CR Coils and HR Coils. CR coils refer to cold rolled coils and HR coils here refer to hot rolled coils in the steel industry.

AG Universal was originally established under the name of Akshata Polymers and it operated in the petroleum polymers business. As a result, the company also has a business affinity with Reliance Industries. It has a dealership agreement with Reliance Industries Ltd for its petroleum products and has other reputed clients in its roster which includes Surya Roshni Ltd, Jindal Supreme India Ltd, Swastik Pipes Ltd, Ravindra Tubes Ltd, SKS Ispat, etc. AG Universal will be using the proceeds of the fresh issue for working capital purposes.