Netweb Technologies India IPO lists at 89.4% premium, but tapers later

Netweb Technologies India Ltd had a very strong listing on 27th July 2023, listing at a smart premium of 89.4%, but tapering later to close below the listing price, although the closing price on 27th July 2023 was still way above the IPO price. In a sense the markets opened strong but gave up gains in the second half of the day. For the day, the Nifty closed 118 points lower while the Sensex closed a full 440 points lower. This led to the stock also losing momentum after a strong listing. The stock had seen a very strong subscription in the IPO. The subscription was 90.55X  overall and QIB subscription at 220.69X. Hence the listing was expected to be extremely strong, which is what we got to see at the opening. However, the sharp fall in the market later in the day led to the stock also losing value from its listing price. Here is the Netweb Technologies India Ltd listing story on 27th July 2023.

IPO subscription and pricing details

The IPO price was fixed at the upper end of the band at ₹500 which was anyways along expected lines considering the extremely strong 90.55X overall subscription and the 220.69X QIB subscription in the IPO. In addition, the retail portion had got subscribed 19.48X in the IPO while the HNI / NII portion also got a healthy subscription of 83.21X. The price band for the IPO was ₹475 to ₹500. On 27th July 2023, the stock of Netweb Technologies India Ltd listed on the NSE at a price of ₹947, a very sharp premium of 89.4% over the IPO issue price of ₹500. On the BSE also, the stock listed at ₹942.50, a premium of 88.5% to the IPO price.

How the stocks closed on both the exchanges

On the NSE, Netweb Technologies India Ltd closed on 27th July 2023 at a price of ₹912. That is a first day closing premium of 82.4% on the issue price of ₹500 but a discount of -3.70% on the listing price of ₹947. In fact, the listing price turned out to be very close to the high price of the day and the stock traded for major part of the trading day below the opening listing price. On the BSE, the stock closed at ₹910.50. That represents a first day closing premium of 82.10% above the IPO issue price but a discount of -3.40% below the listing price on the stock exchange. On both the exchanges, the stock sharply above the IPO issue price but closed Day-1 below the listing price although it was still above the IPO price. In fact, the high of the day was slightly above the listing price while the low was much lower in the day. Clearly, the tepid performance of the markets took its toll on the stock in the second half of trading on 27th July 2023 as most traders rushed for the exits. In short, the real problem was the sharp fall in the markets on Thursday, especially in the second half.

Price volume story on the NSE

Let us look at how the stock traversed on the National Stock Exchange (NSE) on 27th July 2023. On Day-1 of listing, Netweb Technologies India Ltd touched a high of ₹952 on the NSE and a low of ₹876.05. The discount to the listing sustained through the day, although the stock was always above the  IPO issue price. In fact, if you look at the range of prices, the stock opening price turned out to be very close to the high point of the day while the closing price was somewhere mid-way between the high price and the low price of the day. The fall was exacerbated by the fact that after a positive opening the markets fell vertically in the last few hours of trading. On Day-1 of listing, the Netweb Technologies India Ltd stock traded a total of 170.46 lakh shares on NSE amounting to value of ₹1,575.07 crore during the day.  The order book during the day showed a lot of back and forth with the bias shifting from buying to selling. However, the stock closed the day with un-sold buy orders of 17,111 shares on the NSE. The table below captures the opening price discovery in the pre-open period on the NSE.

Data Source: NSE

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 27th July 2023. On Day-1 of listing, Netweb Technologies India Ltd touched a high of ₹953 on the BSE and a low of ₹875.60 The discount to the listing sustained through the day, although the stock was always above the IPO issue price. In fact, if you look at the range of prices, the stock opening price turned out to be very close to the high point of the day while the closing price was somewhere mid-way between the high price and the low price of the day. The fall in the stock price during the day was exacerbated by the fact that after a positive opening the overall markets fell vertically in the last few hours of trading. On Day-1 of listing, the Netweb Technologies India Ltd stock traded a total of 11.02 lakh shares on BSE amounting to value of ₹101.67 crore during the day.  The order book during the day showed a lot of back and forth with the bias shifting from buying to selling. The fact remains that the close showed a good bounce from the lows of the day.

Market cap and delivery volumes

While the volumes on the BSE were not as much as on the NSE, the trend was once again the same. The order book through the day showed a lot of selling pressure with the sell orders far exceeding the buy orders at any point of time. However, the bounce from the lows does indicate a signal of strength in the stock. That makes it a rather neutral stock after the strong listing on Thursday. However, the correction can also be attributed to the selling pressure on Thursday in the market overall. On the NSE, out of the total 170.46 lakh shares traded during the first day of trading, the deliverable quantity represented 69.26 lakh shares or a deliverable percentage of 40.63% on the NSE. That shows a lot of delivery action in the counter. Even on the BSE, out of the total 11.02 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 4.51 lakh shares representing total deliverable percentage of 40.91%, almost at par with the delivery action on the NSE.

At the close of Day-1 of listing, Netweb Technologies India Ltd had a market capitalization of ₹5,104.72 crore with free-float market cap of ₹816.75 crore. Netweb Technologies India Ltd has issued capital of 560.65 lakh shares with a par value of ₹2 per share.