Greenchef Appliances Ltd SME-IPO lists at 19.54% premium, gains further

Greenchef Appliances Ltd had a strong listing on 06th July 2023, listing at a sharp premium of 19.54%, but subsequently bounced and closed much above the listing price at the close of trading. In a sense, the Nifty surged by 99 points and closed absolutely at the threshold of the 19,500 mark, which helped to buoy the sentiments in the market. This helped the stock of Greenchef Appliances Ltd to hold on and closed with smart gains on the listing day. Several positive factors weighed on the markets on 06th July 2023. For instance, the Greenchef Appliances Ltd IPO was buoyed by macro factors like the positive CAD, the promise of flat to lower rates in Indi and global growth picking up faster than expected. Above all, the business model and positioning also appealed to the investors.

The stock of Greenchef Appliances Ltd did show a lot of strength during the day, and closed 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. Greenchef Appliances Ltd opened 19.54% higher and the opening price turned out to be the low price for the day. With subscription of 62.63X for the retail portion, 307.09X for the HNI / NII portion and 17.11X for the QIB portion; the overall subscription was quite healthy at 44.89X. The subscription numbers were so strong that it allowed the stock to list at a huge premium and then sustain the premium post listing.

The SME IPO of Greenchef Appliances Ltd was priced in the price band of ₹82 to ₹87 with the price being discovered at the upper end of the band at ₹87 per share via book building method. On 06th July 2023, the stock of Greenchef Appliances Ltd listed on the NSE at a price of ₹104, a premium of 19.54% on the IPO issue price of ₹87. However, the stock bounced sharply from these levels and it closed the day at a price of ₹109.20, which is 25.52% above the IPO price and 5% above the listing price of the stock on the first day of listing. In a nutshell, the stock of Greenchef Appliances Ltd closed the day exactly at the upper circuit price for the stock of 5% with only buyers and no sellers. The upper circuit price on listing day is calculated on the listing price and not on the IPO price. The opening price actually turned out to be the low price of the day.

On Day-1 of listing i.e., on 06th July 2023, Greenchef Appliances Ltd touched a high of ₹109.20 on the NSE and a low of ₹104 per share. The opening price turned out to be the low point while the stock closed at the high point of the day. Incidentally, the closing price also represented the 5% upper circuit price of the stock for the day, which is the maximum that the SME IPO stock is allowed to move in the day. What is truly appreciable is that the stock closed strong despite the overall Nifty facing some hurdle at the level of 19,500 levels. The stock closed at the 5% upper circuit with 1,52,000 buy quantity and no sellers. For the SME IPOs, 5% is the upper limit over the listing price on the day of listing. Here is the gist of the price discovery of the stock in the pre-open session.

Data Source: NSE

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Greenchef Appliances Ltd stock traded a total of 17.79 lakh shares on NSE SME segment amounting to value of ₹1,886.84 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 at the upper end of the circuit filter. It must be noted here that Greenchef Appliances 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, Greenchef Appliances Ltd had a market capitalization of ₹254.13 crore with free-float market cap of ₹48.28 crore. It has a total of 232.72 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 17.79 lakh shares during the day is accounted for only by delivery trades.

Here is a quick take on the business background of Greenchef Appliances Ltd. The company is an SME IPO on the NSE which had opened for subscription on 23rd June 2023. The company was incorporated in the year 2010 and is engaged in the manufacture of kitchen appliances under the brand name of Greenchef. Its brands are fairly popular and also well received among the buyers. Its range of products include gas stoves, pressure cookers, mixer grinders, wet grinders, rice cookers, induction cooktop, and a whole range of non-stock cookware including pans, pots, and kettles. It purely focuses on the kitchen ware segment only.

Greenchef Appliances Ltd sells its products through offline outlets and also online through popular internet platforms like Flipkart, JioMart, Big Basket and Amazon. In short, the company has adopted an omnichannel strategy to tap its customers more effectively. Apart from selling products, the company also provides its customers with after-sales services including installation, repairs, maintenance, annual contracts etc, so as to give a full 36- degree option of services to the customer. It sells its products offline through a network of 107 authorized dealers located in 15 different states of India. The company has 3 manufacturing facilities in Karnataka and one in Himachal Pradesh, where these kitchen equipment are manufactured by Greenchef Appliances Ltd.