Arabian Petroleum IPO Listed at 10.57% Higher

Arabian Petroleum Ltd lists higher; but tapers later

Arabian Petroleum Ltd had a modest listing on 09th October 2023, listing at a premium of 10.57%, and subsequently closing lower for the day as compared to the listing price. Of course, the stock may have closed below the listing price but still closed above the IPO issue price of Arabian Petroleum Ltd. For the day, the Nifty closed 141 points lower while the Sensex closed with losses of 483 points. Both the Nifty and the Sensex have now seen losses on Monday after 2 days of gains. The sharp fall in the market was triggered by the geopolitical risks in the Middle East and West Asia and this performance of Arabian Petroleum Ltd on the day of listing was impacted by this factor as the overall sentiments in the market got clouded by the ongoing war in West Asia.

With subscription of 23.19X for the retail portion, and 15.72X for the HNI / NII portion; the overall subscription was fairly healthy at 19.91X. The IPO was a fixed price issue with a fixed price of ₹70 per share. The stock listed at a modest premium of 10.57%, but the negative sentiments in the market along with sustained ongoing geopolitical risk led to the stock tapering after listing. However, the stock only fell marginally and closed above the IPO issue price for the day. The weakness in the market overall led to the stock seeing closing losses for the day as compared to the listing price on Monday, 09th October 2023.

Stock closes Day-1 at lower price, after modestly positive opening

Here is the pre-open price discovery for the Arabian Petroleum IPO on the NSE.

Data Source: NSE

The SME IPO of Arabian Petroleum Ltd was priced at ₹70 per share, as a fixed IPO issue on the NSE SME segment. On 09th October 2023, the stock of Arabian Petroleum Ltd listed on the NSE at a price of ₹77.40, a premium of 10.57% over the IPO issue price of ₹70. However, the stock came under pressure later on due to the weak sentiments in the market. For the day, the stock of Arabian Petroleum Ltd closed at a price of ₹76.10 which is 8.71% above the IPO issue price of ͭ₹70 per share and a full -1.68% below the listing price of the stock at ₹77 per share on the first day of listing. In a nutshell, the stock of Arabian Petroleum Ltd had closed the day below the listing price of the day but still above the issue price of the IPO.

On the day of listing on 09th October 2023, the stock did veer towards the lower circuit but bounced from these levels. It must be remembered that in the case of SME stocks, the upper circuit price and the lower circuit price on listing day is calculated on the listing price and not on the IPO price. The low price of the day was much lower at ₹74.25 compared to the opening listing price of ₹77.40. However, that did not deter the stock from bouncing sharply and closing the day at ₹76.10 per share. The stock did not even get close to the upper circuit price as it touched a high of only ₹78.80 for the day. Being an SME IPO stock, it is constrained by the 5% upper circuit limit for the day.

How prices traversed for Arabian Petroleum Ltd on listing day

On Day-1 of listing i.e., on 09th October 2023, Arabian Petroleum IPO touched a high of ₹78.80 on the NSE and a low of ₹74.25 per share. The high price of the day was above the listing price as well as the closing price for the day. In fact, the stock was quite volatile during the day as it remained firmly in the range between the upper circuit and the lower circuit. In fact, the stock enjoyed a strong listing but the close of the stock got impacted by the volatility in the market overall and the sharp fall in the Nifty and the Sensex led the stock to close below the listing price.

However, the stock was just about 1.68% below the listing price at close despite the negative sentiments in the market. The stock closed the day with 4,000 sell quantity and no buyers 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. Incidentally, the stock was fairly volatile in a narrow range during the day.

Robust volumes for Arabian Petroleum Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Arabian Petroleum Ltd stock traded a total of 12.22 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹938.74 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 led the stock to close below the IPO issue listing price but still above the IPO issue price. It must be noted here that Arabian Petroleum 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 only, barring certain trade exceptions.

At the close of Day-1 of listing, Arabian Petroleum Ltd had a market capitalization of ₹82.89 crore with free-float market cap of ₹22.01 crore. It has a total of 108.92 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 12.22 lakh shares during the day is accounted for only by delivery trades only, barring some market trade exceptions.