Goyal Salt IPO Listed at 242% higher, then upper circuit

Goyal Salt IPO lists 242% higher, then hits upper circuit

Goyal Salt IPO had a strong listing on 11th October 2023, listing at a premium of 242%, and subsequently hitting the 5% upper circuit on the listing price. Of course, the stock closed comfortably above the IPO issue price and the IPO listing price for the day. For the day, the Nifty closed 122 points higher while the Sensex closed with gains of 394 points. Both the Nifty and the Sensex have now seen two consecutive days of gains and this performance by Goyal Salt Ltd on the day of listing was largely helped by the robustness in the market sentiments overall.

With subscription of 377.97X for the retail portion, 67.20X for the QIB portion and 382.45X for the HNI / NII portion; the overall subscription was extremely healthy at 294.61X. The IPO was a book building issue in the price band of ₹36 to ₹38 per share and the price discovery happened at the upper end of the band at ₹38 per share. The stock listed at a strong premium of 242%, and the positive sentiments in the market along with sustained dovishness in the monetary policy only helped the cause. However, subsequently, the stock not only held the gains but also hit the upper circuit of 5%, which showed added strength and momentum in the stock after such a robust and premium listing of 242% on opening. This was partially due to the strong sentiments in the market on the day and partially due to the strong subscriptions for the day.

Stock closes Day-1 at 5% upper circuit, after a 100% premium start

Here is the pre-open price discovery for the Goyal Salt IPO on the NSE.

Data Source: NSE

The SME IPO of Goyal Salt Ltd was priced at ₹38 per share, at the upper end of the IPO price band. On 11th October 2023, the stock of Goyal Salt Ltd listed on the NSE at a price of ₹130, a premium of 242% over the IPO issue price of ₹38. However, the stock got a further boost post listing and it closed the day at a price of ₹136.50 which is 259% above the IPO issue price of ͭ₹38 per share and a full 5% above the listing price of the stock at ₹130 per share on the first day of listing. In a nutshell, the stock of Goyal Salt Ltd had closed the day exactly at the upper circuit price for the stock of 5% with only buyers and no sellers in the counter. Like the upper circuit price, even 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 Rs123.50 compared to the opening listing price of Rs130. However, that did not deter the stock from bouncing sharply and touching the 5% upper circuit, which is where it closed for the day. Being an SME IPO stock, it is constrained by the 5% upper circuit limit for the day.

How prices traversed for Goyal Salt IPO on listing day

On Day-1 of listing i.e., on 11th October 2023, Goyal Salt Ltd touched a high of ₹136.50 on the NSE and a low of ₹123.50 per share. In short, the stock touched the lower circuit of the day first, before bouncing back and surging towards the upper circuit, where it closed. The stock actually traversed the completed permitted range for the day. The high price of the day was exactly the closing price of the stock while the stock low price of the day was well below the listing price. In fact, the stock was quite volatile during the day as it first hit the 5% lower circuit during the day, but later recovered to close at the 5% upper circuit of the day. The closing price of the day, or the high price of the day, also represents the upper circuit of 5%. That is the maximum that the SME IPO stock is allowed to move in the day, either ways and the stock moved the entire permissible range during the day. In fact, the stock enjoyed a strong listing and a close at the upper circuit on a day, but not without its share of gyrations and volatility during the day. This was also supported by the rally in the Nifty and the Sensex, which helped to boost the sentiments around the stock, apart from the positive vibes coming from the RBI monetary policy during the day. The stock closed at the 5% upper circuit with a large buy quantity and no sellers 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 hit both extremes during the listing day, before eventually closing at the upper circuit for the day.

Robust volumes for Goyal Salt IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Goyal Salt Ltd stock traded a total of 27.57 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹3,554.88 lakhs on the first day.  This is well above the median volumes that stocks get to see on the first day of listing on the NSE SME segment. 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 led the stock to close at the upper end of the circuit filter. It must be noted here that Goyal Salt 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 27.57 lakh shares purely represents the delivery volumes only.

At the close of Day-1 of listing, Goyal Salt Ltd had a market capitalization of ₹244.34 crore with free-float market cap of ₹66.91 crore. It has a total of 179.00 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 27.57 lakh shares during the day is accounted for only by delivery trades only, barring some market trade exceptions that may arise from time to time.