ROX Hi-Tech IPO Lists at 62.65% premium, then hits upper circuit

Premium listing for ROX Hi-Tech Ltd, plus upper circuit

ROX Hi-Tech IPO had a very strong listing on 16th November 2023, listing at a premium of 62.65%. After a strong  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 listing price at the close of trading on 16th November 2023. What also favoured the performance of the stock was the market support with the Nifty and the Sensex gaining in a steady manner through the day. On 16th November 2023, the Nifty closed 90 points higher while the Sensex closed 307 points higher. In the last few days, the Nifty has been volatile but has managed to hold the 19,700 mark during the week and that is what matters to the market. Today, the Nifty closed above the 19,760 mark. It was even trading well above 19,800 during the day but could not sustain these gains. The strength in the Nifty and the Sensex is on the back of follow-up buying in Indian markets after the US inflation came in sharply lower at 3.2% earlier this week, although India trade data was slightly shaky.

Subscription and price performance of ROX Hi-Tech Ltd on listing day

Let us now turn to the subscription story of ROX Hi-Tech IPO. With hefty subscription of 204.02X for the retail portion, 106.25X for the QIB portion, and 366.86X for the HNI / NII portion; the overall subscription was extremely healthy at 214.44X. The IPO was a book built IPO issue with the IPO price band in the range of ₹80 to ₹83 per share. Thanks to the robust response to the IPO, the stock price for the IPO got discovered at the upper band at ₹83 per share. The stock listed at a strongly positive premium of 62.65% on the NSE SME segment. However, subsequently, despite the stock seeing some volatility in the early parts of 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 improving 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 ₹83 per share and secondly on the day of listing, the stock managed to hold gains and close at the 5% upper circuit for the day in a market that has seen a lot of volatility of late.

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

Here is the pre-open price discovery for the SME IPO of ROX Hi-Tech Ltd on the NSE.

Data Source: NSE

The SME IPO of ROX Hi-Tech Ltd was priced at ₹83 per share, being the upper end of the book building price band. On 16th November 2023, the stock of ROX Hi-Tech Ltd listed on the NSE at a price of ₹135.00, a premium of 62.65% over the IPO issue price of ₹83 per share. However, despite a volatile day post listing on 16th November 2023, the stock of ROX Hi-Tech Ltd closed exactly at the upper circuit price of ₹141.75 per share. The stock had an upper circuit limit of ₹141.75 for the day and a lower circuit limit of ₹128.25 for the day. In the midst of the volatility in trading during the day, the stock hit the upper circuit but stayed put at the upper circuit price for the better part of the day. Forget about the lower circuit of the day, the opening price of the day turned out to be the low price of the day and the stock never really went below the opening price through the day. The closing price reflects a strong day of trading, because it closed at the upper circuit and never really dipped below the listing price, which also happened to be the low price of the day. Also, the upper circuit comes on top of a 62.65% premium listing of the stock, which is all the more appreciable, considering that the Nifty and the Sensex had their share of volatility on the day of listing of ROX Hi-Tech Ltd.

Being an SME IPO on the NSE, the stock of ROX Hi-Tech 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 of the day was also the low price of the day, meaning the stock never really dipped below the listing price and spent most part of the day at the upper circuit, locked in. During the day, the stock hit the upper circuit but stayed well above the lower circuit but the close was exactly at the upper circuit price. In fact, the stock never dipped below the listing price through the day. On the NSE, the stock of ROX Hi-Tech 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 ROX Hi-Tech Ltd on listing day

On Day-1 of listing i.e., on 16th November 2023, ROX Hi-Tech Ltd touched a high of ₹141.75 per share on the NSE and a low of ₹135 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 the opening price or the listing price of the session. Between these two extreme prices, the stock was relatively more volatile in the first half and less volatile in the second half but eventually closed at the upper circuit price of the day. In fact, the stock can be said to have enjoyed a strong listing and largely supported by a 90 points rally in the Nifty and a 307 points rally in the Sensex.

For the whole trading day, the stock never really dipped below the listing price of ₹135 per share, which also turned out to be the low price of the day. In terms of the circuit filter limits, the stock of ROX Hi-Tech Ltd had an upper circuit filter limit of ₹141.75 and a lower circuit band limit of ₹128.25. The stock closed the day 70.78% above the IPO issue price of ₹83 per share and it also closed 5% above the listing price of the day at ₹135 per share. During the day, the stock of ROX Hi-Tech Ltd hit the upper circuit and stayed locked in the upper circuit for most part of the day. It never really dipped below the listing price of the day, leave alone getting close to the lower circuit price of the day. The stock closed strong at the upper circuit at the close of the day with 30,400 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 ROX Hi-Tech Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the ROX Hi-Tech Ltd stock traded a total of 20.768 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹2,858.30 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 hardly volatile during the day. It must be noted here that ROX Hi-Tech 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, ROX Hi-Tech Ltd had a market capitalization of ₹323.71 crore with free-float market cap of ₹132.90 crore. It has a total of 228.36 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 20.768 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market.