Plada Infotech Services IPO Listed at 22.92% higher, hits lower circuit

Premium listing for Plada Infotech Services IPO, then hits lower circuit

Plada Infotech Services Ltd had a strong listing on 13th October 2023, listing at a premium of 22.92%, but subsequently the stock came under pressure and hit the -5% lower circuit on the listing price. Of course, the stock closed comfortably above the IPO issue price but it surely closed below the IPO listing price for the day. Overall, the markets did come under pressure with the Nifty closing 43 points lower and the BSE Sensex closed 126 points lower. Due to the se negative cues from the market, the stock opened strong but later fell sharply to close at the -5% lower circuit for the day.

With subscription of 73.78X for the retail portion, and 39.81X for the HNI / NII portion; the overall subscription was extremely healthy at 57.85X. The IPO was a fixed price issue with the IPO price fixed at ₹48 per share. The stock listed at a strong premium of 22.92%, on a day when the market sentiments were under pressure overall, with the Nifty and the Sensex closing with losses for the day. However, subsequently, the stock could not hold on to the gains under selling pressure as the stock eventually closed at the lower circuit of -5%. The weak undertone of the market led to Plada Infotech Services IPO closing at the lower circuit despite a strong listing and a relatively strong subscription story.

Stock closes Day-1 at -5% lower circuit, after a very strong start

Here is the pre-open price discovery for the Plada Infotech Services IPO on the NSE.

Data Source: NSE

The SME IPO of Plada Infotech Services Ltd was priced at ₹48 per share via the fixed IPO pricing mode. On 13th October 2023, the stock of Plada Infotech Services Ltd listed on the NSE at a price of ₹59, a premium of 22.92% over the IPO issue price of ₹48 per share. However, the stock could not hold on to the early gains and eventually it closed the day at a price of ₹56.05 which is still 16.77% above the IPO issue price of ͭ₹48 per share but a full -5% below the listing price of the stock at ₹59 per share on the first day of listing. In a nutshell, the stock of Plada Infotech Services Ltd had closed the day exactly at the lower circuit price for the stock of -5% with only sellers and no buyers in the counter, despite a strong and robust opening.

Like the upper circuit price, even the lower circuit price on listing day is calculated on the listing price and not on the IPO price. The opening price or listing price of ₹59 per share was still below the high price of the day at ₹60 per share, while the closing price was exactly at the low price of the day, being the -5% lower circuit limit for the day. While the stock hit the lower circuit filter for the day at close, even during the trading session, the stock price did not get close to the upper circuit price of ₹61.95 per share.

How prices traversed for Plada Infotech Services IPO on listing day

On Day-1 of listing i.e., on 13th October 2023, Plada Infotech Services Ltd touched a high of ₹60 on the NSE and a low of ₹56.05 per share. The low price of the day was exactly the closing price of the stock while the stock high price of the day was above the opening price of the day. For instance, the opening price of the day was ₹59 per share, but the high price of the day was ₹60 per share, which was still short of the upper circuit price of ₹61.95 per share. In short, the stock was volatile during the day, with the bias clearly on the downside post listing. That is a typical sign of intraday loss of momentum on the day of listing. The closing price of the day, or the low price of the day, also represents the lower circuit of -5%.

That is the maximum that the SME IPO stock is allowed to move in the day, either ways. In fact, the stock enjoyed a strong listing and a close at the lower circuit on a day when the Nifty was down 43 points and the Sensex was down 126 points. The stock closed at the -5% lower circuit with pending sell orders of 6,000 shares open and no buyers in the counter. 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 as they are listed on the Trade to Trade segment of BSE and the BE segment of the NSE.

Moderate volumes for Plada Infotech Services IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Plada Infotech Services Ltd stock traded a total of 9.99 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹576.82 lakhs on the first day. It must be said that the volumes were relatively moderate compared to other SME IPOs that we have seen on the NSE in the past.  The order book during the day showed a lot of selling post listing with the sell orders consistently exceeding the buy orders at any point of time. That also led the stock to close at the lower end of the circuit filter. It must be noted here that Plada Infotech Services 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 only.

At the close of Day-1 of listing, Plada Infotech Services Ltd had a market capitalization of ₹48.06 crore with free-float market cap of ₹17.96 crore. It has a total of 85.74 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment (BE Segment on the NSE), the entire volume of 9.99 lakh shares during the day is accounted for by delivery trades only, barring some market trade exceptions, which could occur from time to time.