Rajgor Castor Derivatives IPO lists 18%, Triggers Upper Circuit

Premium listing for Rajgor Castor Derivatives IPO, then upper circuit

Rajgor Castor Derivatives IPO had a very strong listing on 31st October 2023, listing at a premium of 18%. However, after a dull opening, the stock closed the day at the 5% upper circuit over the listing price. For the day, the stock closed comfortably above the IPO issue price and the IPO price at the close of trading on 31st October 2023. What stood out was the performance of the stock even in the midst of a sharp fall in the markets overall. On Tuesday, 31st October 2023, the Nifty closed 61 points in the red while the Sensex closed 238 points lower. In the last few days, the Nifty has been volatile but has managed to just about hold the 19,000 mark during the week. The weakness in the market was largely on account of the aggressive profit booking. It is not just the rise of geopolitical risk but the sharp spike in the US bond yields that is spooking the Indian markets.

Let us now turn to the subscription story of Rajgor Castor Derivatives IPO. With hefty subscription of 80.70X for the retail portion, 35.52X for the QIB portion, and 260.01X for the HNI / NII portion; the overall subscription was extremely healthy at 107.43X. The IPO was a book built IPO issue with the IPO price brand in the range of ₹47 to ₹50 per share. The stock listed at a strongly positive premium of 18%, even on a day when the market sentiments were extremely weak overall. However, subsequently, despite the stock opening to a tepid start for the day, it went on to close at the upper circuit of 5% over the listing price. This was reflective of strength in the stock amidst the weak broader market sentiments. The subscription normally impacts the price discovery in book building issues and the listing price. The strong subscription had a positive impact on the ability of the stock  in two ways. Firstly, it led to the stock price getting discovered at the upper end of the band at ₹50 per share and secondly on the day of listing, the stock managed to hold gains and close at the upper circuit for the day in a market where the indices had fallen sharply.

Stock closes Day-1 at upper circuit, after a very strong start

Here is the pre-open price discovery for the Rajgor Castor Derivatives IPO on the NSE.

Data Source: NSE

The SME IPO of Rajgor Castor Derivatives Ltd was priced at ₹50 per share, being the upper end of the book building price band. On 31st October 2023, the stock of Rajgor Castor Derivatives Ltd listed on the NSE at a price of ₹59, a premium of 18% over the IPO issue price of ₹50. However, despite a volatile day post listing on 31st October 2023, the stock of Rajgor Castor Derivatives Ltd closed exactly at the upper circuit price of ₹61.95 per share. The stock had an upper circuit limit of ₹61.95 for the day and a lower circuit limit of ₹56.05 for the day. In the midst of the volatility in trading during the day, the stock hit the upper circuit and also the lower circuit before eventually closing the day exactly at the upper circuit price. The closing price reflects a strong day of trading, because it closed at the upper circuit after touching the lower circuit during the early trades. Also, the upper circuit comes on top of an 18% premium listing of the stock, which is all the more appreciable on a day when the Nifty was down 61  points and the Sensex was down 238 points.

Being an SME IPO on the NSE, the stock of Rajgor Castor Derivatives Ltd was subjected to 5% circuit filter on listing day and was also in the ST (trade to trade) segment. That means, only delivery trades are permitted on the stock. 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 actually turned out to be the mid-point of the day. During the day, the stock hit the upper circuit and the lower circuit but the close was exactly at the upper circuit price. On the NSE, the stock of Rajgor Castor Derivatives Ltd has been admitted to trade in the ST category. The ST category is specifically for the SME Emerge segment of the NSE with compulsory trade to trade settlement. On such stocks, netting of positions is not permitted and every trade has to be settled by delivery only.

How prices traversed for Rajgor Castor Derivatives IPO on listing day

On Day-1 of listing i.e., on 31st October 2023, Rajgor Castor Derivatives Ltd touched a high of ₹61.95 on the NSE and a low of ₹56.05 per share. The high price of the day was exactly the upper circuit limit price of the stock while the stock low price of the day was exactly at the lower circuit price of the stock. Between these two extreme prices, the stock was extremely volatile and eventually closed at the upper circuit price of the day. In fact, the stock can be said to have enjoyed a strong listing and a close at the listing price on a day when the Nifty was down 61 points and the Sensex was down about 238 points.

Through a better part of the day, the stock stayed above the IPO issue price at most points of time although it hovered below the listing price of the day on several occasions, even touching the lower circuit briefly in the process. In terms of the circuit filter limits, the stock of Rajgor Castor Derivatives Ltd had an upper circuit filter limit of ₹61.95 and a lower circuit band limit of ₹56.05. The stock closed the day 23.9% above the IPO issue price of ₹50 per share and it also closed 5% above the listing price of the day at ₹59 per share. During the day, the stock of Rajgor Castor Derivatives Ltd hit the upper circuit and the lower circuit before closing exactly at the upper circuit price for the day. The stock closed strong at the upper circuit at the close of the day with 69,000 buy quantity and no sellers 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.

Robust volumes for Rajgor Castor Derivatives IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Rajgor Castor Derivatives Ltd stock traded a total of 49.95 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹2,938.56 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 led the stock to close with pending buy orders at the end of the trading session, although the price was volatile during the day. It must be noted here that Rajgor Castor Derivatives 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, Rajgor Castor Derivatives Ltd had a market capitalization of ₹148.16 crore with free-float market cap of ₹55.10 crore. It has a total of 239.16 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 49.95 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market.