Master Components IPO Opens Flat, Closes Flat

Flat listing for Master Components IPO, closes flat too

Master Components Ltd had an absolute flat listing and flat closing on 29th September 2023. The stock of Master Components had a virtually flat listing and also had a flat closing, moving in a very narrow range through the day. Of course, the stock closed marginally above the IPO issue price and marginally below the IPO listing price for the day. What is worth noting here is that this happened despite the Nifty spiking by 115 points during the day and the Sensex closing sharply higher by 320 points. With subscription of 10.11X for the retail portion and 5.89X for the HNI / NII portion; the overall subscription was modest to healthy at 8.20X. The IPO was a fixed price issue with the IPO price already fixed at ₹140 per share. For modest subscription and a strong market performance, the show put up by Master Components can be said to be lacklustre on listing day.

As part of the fresh issue portion, Master Components Ltd issued a total of 7,00,000 shares (7.00 lakh shares), which at the fixed IPO price of ₹140 per share aggregates to a total fund raising of ₹9.80 crore. The offer for sale (OFS) entailed the sale of 4,02,000 shares (4.02 lakh shares), which at the fixed IPO price of ₹140 per share aggregated to total OFS size of ₹5.63 crore. As a result, the total issue size of Master Components Ltd will entail the issue and sale of 11,02,000 shares (11.02 lakh shares), which at the fixed IPO price of ₹140 per share aggregates to a total fund raising of ₹15.43 crore.

Stock closes Day-1 absolutely flat, after a flat opening

Here is the pre-open price discovery for the Master Components IPO on the NSE.

Data Source: NSE

On 29th September 2023, the stock of Master Components Ltd listed flat on the NSE at a price of ₹140.40, a marginal premium of 0.29% on the IPO issue price of ₹140 per share. However, the stock after rambling through most of the trading session, closed the day at a price of ₹140.30 which is 0.21% above the IPO issue price of ͭ₹140 per share and -0.07% below the listing price of the stock at ₹140.40 per share on the first day of listing. It would be much simpler to cut out such insignificant numbers and just say that the stock of Master Components Ltd listed flat and also closed the day flat on 29th September 2023. The stock also moved in an extremely narrow range through the day. For SME IPO stocks, the normal practice is to start off the listing in the T2T segment with 5% circuit limits on either side i.e., upper side and the lower side. However, despite the robust markets, the stock was very rangebound on listing day and that could be attributed to a clearing and settlement holiday on listing day as well as a string of holidays after that. The opening price of the day and the closing price of the day were very close to the low price of the day.

How prices traversed for Master Components Ltd on listing day

On Day-1 of listing i.e., on 29th September 2023, Master Components Ltd touched a high of ₹142 on the NSE and a low of ₹140.15 per share. The overall range of the stock price movement during the day was less than ₹2 and the opening price and the closing price of the day were very close to the low price of the day. What is surprising is that this tepid and insipid close came on a day when the Nifty had rallied by 115 points and the Sensex had rallied by 320 points. The stock closed the day with low volumes and very limited buying or selling interest in the counter for the day, which could be attributed to the holidays. 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.

Lacklustre volumes for Master Components Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Master Components Ltd stock traded a total of 4.60 lakh shares on NSE SME segment amounting to value of ₹645.70 lakhs on the first day. This is much lower than the median volumes that SME IPOs get to see on listing day. The order book during the day showed weak buying and selling interesting in the counter and that was evident in the stock closing exactly around the opening price of the day. It must be noted here that Master Components 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, Master Components Ltd had a market capitalization of ₹56.12 crore with free-float market cap of ₹15.48 crore. It has a total of 40 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 4.60 lakh shares during the day is accounted for only by delivery trades only.