Sahana Systems IPO lists at 20.74% premium, gains further

Sahana Systems IPO had a strong listing on 12th June 2023, listing at a premium of 20.74% on the NSE SME-IPO segment, but subsequently gaining still further to decisively close above the IPO price and also the listing price. In a sense, the markets were positive on Monday and that helped sentiments on the stock as the Nifty closed above the threshold of the 18,600 mark; well above its last resistance level of 18,400. On a day when the market sentiments were strong, Sahana Systems IPO managed to open with strong gains but closed at the 5% upper circuit of the day; with smart gains for the listing day. For now, the headwinds like the debt ceiling deal, the negative news flows on banks and the possible global slowdown due to excess hawkishness of central banks are reducing. In its latest policy, the RBI has also maintained rates, giving hope to markets that the rate hikes may be done and dusted. Despite the RBI inflation warning, the stock of Sahana Systems Ltd managed to hold strong for the day on listing day.

The stock of Sahana Systems Ltd did show a lot of strength during the day, and closed above the listing price as well as the issue price on the first day of trading on the NSE. Being an NSE SME IPO, it is only traded on the SME segment of NSE. Sahana Systems Ltd opened 20.74% higher and the opening price turned out to be the low price for the day. With subscription of 9.70X for the QIB portion, 7.07X for the HNI / NII portion and 12.97X for the retail portion; the overall subscription stood at around 9.99X. In short, for the subscription percentage, the listing day performance was better than expected. The subscription numbers were fairly tepid with overall subscription not even reaching double digits in oversubscription. However, the stock still showed a strong listing and closure on listing day, due to its rather unique business model, that is in sync with the emerging business paradigms.  

Sahana Systems IPO was priced in the price band of ₹132 to ₹135 via book building issue method. On 12th June 2023, the stock of Sahana Systems Ltd listed on the NSE SME-IPO segment at a price of ₹163, a premium of 20.74% on the IPO issue price of ₹135, which was discovered at the upper end of the band. However, the stock bounced sharply even from these levels as the opening price became the low point for the day and the stock closed exactly at the high point of the day. The closing price of ₹171.15, which is 26.78% above the IPO price and 5% above the listing price of the stock on the first day of listing was also the high point of the day. In a nutshell, the stock of Sahana Systems Ltd had closed the day exactly at the upper circuit price for the stock of 5% with only buyers and no sellers. The upper circuit price of 5% on listing day is calculated on the listing price and not on the IPO price. The opening price actually turned out to be the low price of the day. In SME IPOs, the 5% movement is the maximum permitted to circuit.

On Day-1 of listing i.e., on 12th June 2023, Sahana Systems Ltd touched a high of ₹171.15 on the NSE and a low of ₹163 per share. The opening price turned out to be the low point while the stock closed exactly at the high point of the day. Incidentally, the closing price also represented the 5% upper circuit price of the stock for the day, which is the maximum that the SME IPO stock is allowed to move in the day. What is truly appreciable is that the stock closed strong despite the subscription levels in the IPO being below the normal expectation in such SME IPOs on the NSE SME segment. The stock closed at the 5% upper circuit with 121,000 buy quantity and no sellers. For the SME IPOs, 5% is the upper limit over the listing price on the day of listing.

Let us now turn to the volumes of the stock on the NSE SME IPO segment. On Day-1 of listing, the Sahana Systems Ltd stock traded a total of 15,30,000 shares on NSE SME segment amounting to value of ₹2,528.78 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 helped the stock to close at the upper end of the circuit filter. It must be noted here that Sahana Systems 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, Sahana Systems Ltd had a market capitalization of ₹136.86 crore and a free float market cap of Rs41.06 crore. It has a total of 79,96,493 shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 15.3 lakh shares during the day is accounted for only by delivery trades.

Here is a quick background of Sahana Systems Ltd, an SME IPO on the NSE which opened for subscription on 31st May 2023. Sahana Systems was incorporated in 2020 and is engaged in the business of offering IT-related services. It offers the complete gamut of IT related services including web app development, mobile app development, artificial intelligence / machine learning development (AI & ML), Chatbot development, and product prototyping. It also specializes in user interface as well as in UX and UI design. It caters to user interfaces as well as user experience.

Sahana is a registered start-up as recognized by the Department for Promotion of Industry and Internal Trade, Ministry of Commerce & Industry. This entitles the company to a host of privileges including exemption from angel tax. The funds raised through the fresh issue will be used to finance the installation of its EV charging stations and for meeting working capital requirements.  The issue will be lead managed by Unistone Capital Private Limited and Interactive Financial Services Ltd while Purva Share Registry India Private Ltd will be the registrars to the SME IPO of Sahana Systems Ltd.