Phoenix Overseas IPO Lists at ₹64 on NSE SME, Flat Against Issue Price

Phoenix Overseas Limited, a B2B trading company specialising in agricultural commodities and fashion accessories, made a flat debut on the Indian stock market on Friday, 27th September 2024, with its shares listing at par with the issue price. Despite strong investor demand during the subscription period, the company's initial public offering (IPO) failed to generate a listing premium on its first day of trading.

Listing Details

• Listing Price: Phoenix Overseas shares were listed at ₹64 per share on the NSE SME platform, marking a flat start to its journey as a publicly traded company.
• Comparison to Issue Price: The listing price matches the IPO issue price. Phoenix Overseas had set its IPO price band from ₹61 to ₹64 per share, with the final issue price being fixed at the upper end of ₹64.
• Percentage Change: The listing price of ₹64 on the NSE SME translates to no premium or discount over the issue price of ₹64.

First-Day Trading Performance

• Opening vs. Latest Price: Following its flat opening, Phoenix Overseas' share price declined. By 10:29 AM, the stock was trading at ₹60.80, down 5% from its opening price and issue price, hitting the lower circuit for the day.
• Market Capitalisation: As of 10:29 AM, the company's market capitalisation stood at ₹117.62 crore.
• Trading Volume: The traded volume was 15.96 lakh shares with a traded value of ₹10.18 crore, indicating moderate investor interest on the first day of listing.

Market Sentiment and Analysis

• Market Reaction: The market reacted cautiously to Phoenix Overseas' listing. The flat listing and subsequent decline indicate some investor scepticism regarding the company's immediate prospects.
• Subscription Rate: Despite the weak listing, the IPO was heavily oversubscribed by 119.22 times, with retail investors leading at 148.43 times subscription, followed by NIIs at 109.71 times, and QIBs at 65.74 times.
• Price Band: The stock hit its lower circuit of ₹60.80 (5% below the opening price) during morning trading.

Growth Drivers and Challenges 

Expected drivers of future performance:

• Strong presence in agro commodities trading with flexibility between exports and imports
• Diverse client base across national and international markets
• Expansion into fashion accessories manufacturing for international markets

Potential challenges:

• Highly competitive and volatile commodities trading sector
• Dependence on agricultural production and global market conditions
• Inconsistent bottom-line performance in recent years

Utilisation of IPO Proceeds 

• Phoenix Overseas plans to use the funds for:
• Funding working capital requirements
• Pursuing inorganic growth initiatives
• General corporate purposes

Financial Performance 

The company has demonstrated growth:

• Revenue increased by 22% to ₹54,915.1 lakh in FY2024 from ₹45,131.61 lakh in FY2023
• Profit After Tax (PAT) rose by 46% to ₹549.93 lakh in FY2024 from ₹375.48 lakh in FY2023

As Phoenix Overseas begins its journey as a listed entity, market participants will closely monitor its ability to leverage its trading expertise and expand its manufacturing operations to drive future growth and improve shareholder value. The flat listing and subsequent decline, despite strong subscription rates, suggest cautious market sentiment towards the company's prospects in the competitive agricultural commodities and fashion accessories sectors.