Pattech Fitwell Tube SME-IPO lists at 10% premium, gains further

Pattech Fitwell Tube Components IPO had a strong listing on 21st April 2023, listing at a sharp premium of 10%, but subsequently bounced and closed still above the listing price at the close of trading. In a sense, the markets came under pressure as the Nifty was flat and stayed below the psychological 17,650 mark, but the stock of Pattech Fitwell Tube Components Ltd managed to hold on and closed with smart gains for the listing day. For now, the headwinds like the inversion of the yield curve, the negative news flows on banks and the SVB Financial crisis are the major talking points and are actually keeping the markets under pressure. To add to that, the UBS Credit Suisse merger also weighed on the markets on 21st April 2023,. However, despite these headwinds, the stock of Pattech Fitwell Tube Components Ltd managed to hold on for the day quite strong.

The stock of Pattech Fitwell Tube Components 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. Pattech Fitwell Tube Components Ltd opened 10% higher and the opening price turned out to be just above the low price for the day. With subscription of 2.05X for the retail portion and 1.90X for the HNI / NII portion; the overall subscription was very moderate at 1.97X. The subscription numbers were not too strong but despite that, it allowed the stock to list at a fairly comfortable premium and then sustain and build on the premium post listing.

Pattech Fitwell Tube Components IPO was priced at Rs50 via fixed price format. On 21st April 2023, the stock of Pattech Fitwell Tube Components Ltd listed on the NSE at a price of Rs55, a premium of 10% on the IPO issue price of Rs50. However, the stock bounced sharply from lower levels after a volatile session and it closed the day at a price of Rs57.75, which is 15.5% 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 Pattech Fitwell Tube Components Ltd had 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 upper circuit is limited to 5% for all SME IPOs due to a T2T start to listing.

On Day-1 of listing i.e., on 21st April 2023, Pattech Fitwell Tube Components Ltd touched a high of Rs57.75 on the NSE and a low of Rs52.55 per share. The opening price turned out to be above the low point and even the low was above the issue price. 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 being flat to negative on 21st April 2023 and dipping below the psychological level of 17,650 on a closing basis for the listing day. The stock closed at the 5% upper circuit with 3,000 buy quantity and no sellers. For the SME IPOs, 5% is the upper limit over the listing price on the day of listing.

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Pattech Fitwell Tube Components Ltd stock traded a total of 6.12 lakh shares on NSE SME segment amounting to value of Rs338.56 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 Pattech Fitwell Tube 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, Pattech Fitwell Tube Components Ltd had a market capitalization of Rs44.80 crore with free-float market cap of Rs13.89 crore. It has a total of 77.57 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 6.12 lakh shares during the day is accounted for only by delivery trades.

Pattech Fitwell Tube Components Ltd was incorporated in the year 2022. However, in a different form, the company Pattech Fitwell Tube Components has a pedigree of over 11 years and has been around since 2012. The company is engaged in the manufacturing of forging products for the non-automotive sector. These are essentially the forgings that go into the industrial and machinery usage in factories. Pattech Fitwell has a total installed capacity of 14,104.13 MTPA for manufacturing forged flanges, complex and specialized machined components, welded assemblies in the area of open die forgings.

The promoter stake of the company, post the IPO, will dilute from 100% to 60%. The fresh funds infused would be used by the company for funding its working capital needs and to meet general corporate expenses. The IPO is being lead managed by Fedex Securities Ltd while the registrars to the issue are Bigshare Services Private Ltd.