Nova Agritech IPO Lists 34.15% higher, then hits upper circuit

Nova AgriTech Ltd lists higher, hits 5% upper circuit

Nova AgriTech Ltd had a relatively robust listing on 31st January 2024, listing at a robust premium of 34.15% on the NSE but on top of that managed to close with smart gains over the listing price, hitting the upper circuit on listing day. The stock of Nova AgriTech IPO closed the day at ₹57.75 per share, a premium of 5.00% over the listing price of ₹55 per share and a premium of 40.85% over the IPO issue price of ₹41 per share. Certainly, the IPO allottees of Nova AgriTech Ltd would be pleased at the way the stock managed to close in the positive on the day and also hit upper circuit, although the positive vibes from the Nifty and the Sensex helped them along the way.

The pattern was exactly similar on the BSE also, with the stock opening at a premium and then hitting upper circuit for the day. On the Bombay Stock Exchange (BSE), the stock of Nova AgriTech Ltd opened at ₹56 per share, a premium of 36.59% over the IPO issue price of ₹41 per share. For the day, the stock closed on the BSE at ₹58.79, an overall premium of 4.98% on the IPO listing price of ₹56 per share and also a hefty premium of 43.39% over the issue price of ₹41 per share.  On the NSE, the stock of Nova AgriTech Ltd closed the listing day at the high price of the day, which also happened to be the upper circuit price of the day. On the BSE also, the stock of Nova AgriTech IPO closed the day at the upper circuit, after opening at a smart premium on 31st January 2024.

Stock gains amidst strong show by benchmark indices

While the closing price of Nova AgriTech Ltd on 31st January 2024 was substantially above the IPO issue price on both the stock exchanges, it did also hit the upper circuit on both the stock exchanges. In fact, the stock closed above the listing price on the NSE and the BSE. However, it must be remembered that this was helped by a strong performance by the Nifty and the Sensex during the day, although that is not to take away from the stock performance. It was a day of robust listing and then hitting the upper circuit.

On 31st January 2024, the Nifty closed 204 points higher while the Sensex closed 612 points higher. On both the exchanges, it was more an example of the indices bouncing cautiously after the fall yesterday. The markets also showed positive traction ahead of the Union Budget on February 01, 2024; with a lot of expectations, even from an interim budget. Last 3 weeks, FPIs were net sellers to the tune of $3.7 billion in Indian equities. However, the volatility in recent days in the market had little impact on the stock of Nova AgriTech Ltd as it closed above the IPO issue price and the listing price on both the stock exchanges.

IPO subscription and pricing details

The stock had reported strong subscription in the IPO. The subscription was 113.21X  overall and QIB subscription was at 81.13X. In addition, the retail portion had got subscribed 80.20X in the IPO while the HNI / NII portion also got a heavy subscription of 233.03X. Hence the listing was expected to be relatively strong for the day. However, while the listing was modest, the performance strength got reinforced during the trading day as the stock closed at the upper circuit price. While the stock was volatile on both the stock exchanges during the day, it stayed off the upper and lower circuits in trading on 31st January 2024.

The IPO price was fixed at the upper end of the band at ₹41 per share which was anyways along expected lines considering the relatively strong subscription in the IPO. The price band for the IPO was ₹39 to ₹41 per share. On 31st January 2024, the stock of Nova AgriTech Ltd listed on the NSE at a price of ₹55 per share, a premium of 34.15% over the IPO issue price of ₹41 per share. On the BSE also, the stock listed at ₹56, a premium of 36.59% over the IPO issue price of ₹41 per share. Here is the Nova AgriTech Ltd listing story on 31st January 2024.

How the stock of Nova AgriTech Ltd closed on both exchanges

On the NSE, Nova AgriTech Ltd closed on 31st January 2024 at a price of ₹57.75 per share. That is a first day closing premium of 40.85% on the issue price of ₹41 and also a premium of 5.00% on the listing price of ₹55 per share. In fact, the listing price turned out to also become the low of the day. The stock rallied and hit the upper circuit price early in the day and stayed locked in upper circuit for most part of the day. On the BSE also, the stock closed at ₹58.79. That represents a first day closing premium of 43.39% above IPO issue price and a premium of 4.98% above BSE listing price of ₹56 per share.

On both the exchanges, the stock listed strongly above the IPO issue price and also managed to close Day-1 rallying higher, exactly at the upper circuit. There are some key points to note here. Normally, the mainboard IPOs have a circuit filter of 20% either ways. However, in the case of Nova AgriTech Ltd, the circuit filters were fixed at 5% either ways. Being a small sized IPO, the stock was allowed to trade in the BE segment on the NSE and the T segment on the BSE. This is the Trade to Trade segment on  which only delivery trades are permitted and intraday speculative trades are barred. On the NSE, the stock closed with open unmet buying quantity of 19,27,345 shares, showing a lot of pent up buying pressure for the stock on the listing day. Similar sentiments were echoed on the BSE also.

Price volume story of Nova AgriTech Ltd on the NSE

The table below captures the opening price discovery in the pre-open period on the NSE.

Data Source: NSE

Let us look at how the stock traversed on the National Stock Exchange (NSE) on 31st January 2024. On Day-1 of listing, Nova AgriTech Ltd touched a high of ₹57.75 per share on the NSE and a low of ₹55 per share. The premium to the listing price sustained through most part of the day. While the low price of the day was the opening price of the day, the high price was locked in at the 5% upper circuit. Mainboard IPOs normally have a circuit limits of 20%, but in this case, considering the small size of the issue, Nova AgriTech Ltd was placed in BE segment trading and the circuit filters on either side were fixed at just 5%. Also, being in the BE segment, only delivery trades were permitted on the counter.

For the day on the NSE, the upper circuit price was ₹57.75 per share while the lower circuit price was ₹52.25 per share. During the day, the high price of the day at ₹57.75 was exactly at the upper band price while the low price of the day at ₹55 per share was well above the lower band price for the day at ₹52.25 per share. On Day-1 of listing, the Nova AgriTech Ltd stock traded a total of 83.56 lakh shares on NSE amounting to value of ₹46.85 crore (traded turnover) during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the buyers, with very little genuine profit booking visible even towards the end of the trading session. The stock closed the day with pending buy orders of 19,27,345 shares on the NSE, showing pent-up buying.

Price volume story of Nova AgriTech Ltd on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 31st January 2024. On Day-1 of listing, Nova AgriTech Ltd touched a high of ₹58.79 per share on the BSE and a low of ₹55 per share. The premium to the listing price sustained through most part of the day. While the low price of the day was only just below the opening price of the day, the high price was locked in at the 5% upper circuit. Mainboard IPOs normally have a circuit limits of 20%, but in this case, considering the small size of the issue, Nova AgriTech Ltd was placed in T (Trade to Trade) segment trading and the circuit filters on either side were fixed at just 5%. Being in the BE segment, only delivery trades were permitted on the counter.

For the day on the BSE, the upper circuit price was ₹58.79 per share while the lower circuit price was ₹53.21 per share. During the day, the high price of the day at ₹58.79 was exactly at the upper band price while the low price of the day at ₹55 per share was well above the lower band price for the day at ₹53.21 per share. On Day-1 of listing, the Nova AgriTech Ltd stock traded a total of 15.58 lakh shares on BSE amounting to value of ₹9.07 crore (traded turnover) during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the buyers, with very little genuine profit booking visible even towards the end of the trading session. The stock closed the day with pending buy orders and no sellers on the BSE, showing pent-up buying.

Market capitalization, free float, and delivery volumes

Volumes on the BSE were generally lower than on the NSE, but the trend was once again the same. The order book through the day showed a lot of strength and that almost sustained till the close of trading session, with no hints of offloading even towards the latter part of the trading session. The spike in the Nifty and the Sensex also helped the stock of Nova AgriTech Ltd along the way. That makes it a rather attractive stock after the strong listing on Tuesday and its ability to sustain gains on a tough trading day. On the NSE, out of the total 83.56 lakh shares traded during the first day of trading, the deliverable quantity represented 83.56 lakh shares or a deliverable percentage of 100% on the NSE. Being in the T2T segment, speculative intraday trades are not permitted on the counter.

Even on the BSE, out of the total 15.58 lakh shares of quantity traded, the entire volumes were mandatorily delivery driven due to the stock being in the Trade to Trade (T2T) segment. Unlike the regular mainboard segment stocks, which trade in the normal segment with 20% circuit filters, Nova AgriTech was traded in the trade to trade segment with 5% circuit filters either ways to keep the speculative levels under check considering the small size of the issue.

At the close of Day-1 of listing, Nova AgriTech Ltd had a market capitalization of ₹543.92 crore with free-float market cap of ₹146.86 crore. Nova AgriTech Ltd has issued capital of 925.20 lakh shares with a par value of ₹2 per share. The ratio of market cap to issue size (a sign of market liquidity creation) was 3.78X.