Rishabh Instruments IPO lists at 4.32% premium, closes flat

Rishabh Instruments Ltd had a relatively moderate listing on 11th September 2023, listing at a premium of 4.32%, but almost giving up most of the gains by the close of trade on 11th September 2023. While the closing price on 11th September 2023 was still above the IPO price, it was just about marginally higher than the issue price, but well below the IPO listing price for the day. This is rather ironic as the stock markets were at peak buoyancy during the day with the Nifty crossing the 20,000 mark during the day and the Sensex closing well above 67,100 on Monday. For the day, the Nifty closed 176 points higher while the Sensex closed a full 528 points higher. Both the Nifty and the Sensex were in the midst of a relentless bull rally, but that did not really the listing of Rishabh Instruments Ltd on 11th September 2023, the listing day.

In fact, the subscription status was quite strong for the stock. The stock had seen strong subscription in the IPO. The subscription was 31.65X  overall and QIB subscription at 72.54X. Hence the listing was expected to be extremely strong. However, while the listing was moderate at best, the performance was tepid post listing. However, it must be said that the sharp rally in the market during the day hardly helped the stock gain anything substantial. Here is the Rishabh Instruments Ltd listing story on 11th September 2023.

IPO subscription and pricing details

The IPO price of Rishabh Instruments Ltd was fixed at the upper end of the band at ₹441 per share which was anyways along expected lines considering the relatively strong 31.65X overall subscription and the 72.54X QIB subscription in the IPO. In addition, the retail portion had got subscribed 8.44X in the IPO while the HNI / NII portion also got a healthy subscription of 31.29X. The price band for the IPO was ₹418 to ₹441. On 11th September 2023, the stock of Rishabh Instruments Ltd listed on the NSE at a price of ₹460.05, a very moderate premium of just 4.32% over the IPO issue price of ₹441. On the BSE also, the stock listed at ₹460, a premium of just 4.31% over the IPO issue price of ₹441 per share.

How the stock of Rishabh Instruments Ltd closed on both exchanges

On the NSE, Rishabh Instruments IPO closed on 11th September 2023 at a price of ₹441.50. That is a first day closing premium of a paltry 0.11% on the issue price of ₹441 but a rather steep discount of -4.03% on the listing price of ₹460.05. In fact, the listing price turned out to be closer to the low price of the day but the problem was that the stock just could not sustain higher levels and fell vertically from higher levels. On the BSE, the stock closed at ₹442.75. That represents a first day closing premium of 0.40% above the IPO issue price but a discount of -3.75% on the listing price on the BSE. On both the exchanges, the stock listed strongly above the IPO issue price but managed to close very close to the IPO price as the selling pressure picked up in the second half of trading. The price moves were relatively volatile during the day but the stock could not hold on to higher levels despite a strong performance of the Nifty on the day of listing. Clearly, the strong performance of the markets had very little impact on the stock on 11th September 2023 and let the stock to close the day well below the listing price for the day.

Price volume story 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 11th September 2023. On Day-1 of listing, Rishabh Instruments Ltd touched a high of ₹470 on the NSE and a low of ₹432.35. The premium to the listing price sustained for only part of the day, and the stock price did come of very sharply later as it literally trended towards the IPO issue price. Mainboard IPOs also do not have any upper circuit of 5%, unlike SME IPOs. If you look at the range of prices, the opening and closing prices of the day were well between the low and high prices for the day. The strong post-listing performance of the IPO stock was supported by robust markets with the Nifty gaining sharply during the day. However, that advantage did not sustain for too long as the stock gave up gains later in the day. On Day-1 of listing, the Rishabh Instruments Ltd stock traded a total of 80.38 lakh shares on NSE amounting to value of ₹364.85 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers, leading to the sharp fall in the stock price. The stock closed the day with pending sell orders of 23,296 shares on the NSE.

Price volume story on the BSE

Let us now turn to how the stock of Rishabh Instruments Ltd traversed on the Bombay Stock Exchange (BSE) on 11th September 2023. On Day-1 of listing, Rishabh Instruments Ltd touched a high of ₹469.65 on the BSE and a low of ₹432.25. The premium to the listing price sustained for only part of the day, and the stock price did come of very sharply later as it literally trended towards the IPO issue price. Mainboard IPOs also do not have any upper circuit of 5%, unlike SME IPOs. If you look at the range of prices, the opening and closing prices of the day were well between the low and high prices for the day. The strong post-listing performance of the IPO stock was supported by robust markets with the Sensex gaining sharply during the day. However, that advantage did not sustain for too long as the stock gave up gains later in the day and trended lower. On Day-1 of listing, the Rishabh Instruments Ltd stock traded a total of 5.80 lakh shares on BSE amounting to value of ₹26.28 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers, leading to the sharp fall in the stock price. The stock closed the day with pending sell orders on the BSE.

 Market capitalization, free float, and delivery volumes

While the volumes on the BSE were not as much as on the NSE, the trend was once again the same. The order book through the day showed a lot of weakness at higher levels, which eventually led to the stock falling sharply towards the issue price. The sharp bounce in the Nifty and the Sensex from lower levels did not help the fortunes of the stock much on the listing day. On the NSE, out of the total 80.38 lakh shares traded during the first day of trading, the deliverable quantity represented 44.33 lakh shares or a deliverable percentage of 55.15% on the NSE, which is much higher than the routine listing day median. That shows a lot of delivery action in the counter. Even on the BSE, out of the total 5.80 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 2.61 lakh shares representing total deliverable percentage of 44.97%, well below the delivery action on the NSE. Unlike the SME segment stocks, which are on T2T on the day of listing, the mainboard IPOs permit intraday trading even on the day of listing.

At the close of Day-1 of listing, Rishabh Instruments Ltd had a market capitalization of ₹1,680.74 crore with free-float market cap of ₹352.96 crore. Rishabh Instruments Ltd has issued capital of 379.61 lakh shares with a par value of ₹10 per share.

Brief on Rishabh Instruments Ltd

Rishabh Instruments Ltd was incorporated in 1982 to manufacture, design and develop instruments for testing and measuring as well as the manufacture of Industrial Control Products (ICP). Rishabh Instruments also offers cost-effective methods to measure, control, record, analyse, and optimize energy and processes. In addition, Rishabh Instruments also provides complete aluminium high-pressure die-casting solutions for customers in need of close tolerance fabrication. This finds use in areas like automotive compressor manufacturing and automation high precision flow meters. These products are also used in machining, and finishing of precision components. Today, Rishabh Instruments Ltd also has a strong footprint in Europe, thanks to the acquisition of Lumel Alucast in 2011; a European non-ferrous pressure casting company. It specializes in the manufacture and supply of low-voltage current transformers.

The company also offers the outsourcing of certain manufacturing processes. This includes manufacturing services like mould design and manufacturing, EMI and EMC testing services, Electronic Manufacturing Services (EMS), and very customized software solutions to enhance the performance of products. Broadly, in terms of business segments, Rishabh Instruments Ltd has 4 key verticals; Electrical automation devices, Metering, control, and protection devices, Portable test and measuring instruments, and solar string inverters. Currently, the company has 3 manufacturing plants located in India and it services its local and international clients with the support of over 150 dealers in India and another 270 dealers spread across 70 international locations.

The fresh funds will go towards the expansion of the Nashik facility of the company. The issue will be lead managed by DAM Capital Advisors (formerly IDFC Securities), Motilal Oswal Investment Advisors and Mirae Asset Capital Markets. KFIN Technologies Ltd (formerly Karvy Computershare Ltd) will be the registrar to the issue.