Sharp Chucks & Machines IPO Listed at 13.79% higher, but edges lower

Sharp Chucks And Machines IPO lists higher, then trends lower

Sharp Chucks And Machines IPO had a moderate to strong listing on 12th October 2023, listing at a premium of 13.79%, but subsequently the stock came under pressure and trended lower below the listing price. Of course, the stock closed comfortably above the IPO issue price but it did close below the IPO listing price for the day. Overall, there was a moderately negative close for the markets as the Nifty closed 17 points lower while the Sensex closed 65 points lower. However, despite these flat to negative cues from the market, the stock of Sharp Chucks And Machines Ltd opened moderately higher but later fell to close below the listing price for the day.

With subscription of 63.69X for the retail portion, and 38.76X for the HNI / NII portion; the overall subscription was fairly strong at 54.20X. The IPO was a fixed price issue with the IPO price set at ₹58 per share. The stock listed at a moderately strong premium of 13.79%, on a day when the market sentiments were flat to weak through the day after two days of a sharp rally in the indices. However, subsequently, the stock could not hold on to the gains under selling pressure as the stock eventually closed below the listing price for the day. The flat to weak undertone of the market pushed the stock to drift lower despite a moderately strong listing for the stock on opening on the listing day.

Stock lists with moderate gains, but then edges lower

Here is the pre-open price discovery for the Sharp Chucks And Machines IPO on the NSE.

Data Source: NSE

The SME IPO of Sharp Chucks And Machines Ltd was priced at the fixed IPO price of ₹58 per share via the fixed price method. On 12th October 2023, the stock of Sharp Chucks And Machines Ltd listed on the NSE at a price of ₹66 per share, a moderate to strong premium of 13.79% over the IPO issue price of ₹58 per share. However, the stock could not hold on to the early gains and eventually it closed the day at a price of ₹64.50 which is still 11.21% above the IPO issue price of ͭ₹58 per share but the closing price was -2.27% below the listing price of the stock at ₹66 per share on the first day of listing.

In a nutshell, the stock of Sharp Chucks And Machines Ltd had closed the day above the IPO issue price but below the listing price, although the price damage was nothing serious. While the stock was volatile during it did not touch the circuit filters on the higher side or on the lower side. As we shall see later, the price of the day was below the upper circuit filter while the lower price of  the day was above the lower circuit filter. The overall market conditions were flat to negative and that probably ensured that the stock could not sustain the opening gains at close. This is despite the fact that the stock had seen fairly robust subscriptions in its IPO.

How prices traversed for Sharp Chucks And Machines IPO on listing day

On Day-1 of listing i.e., on 12th October 2023, Sharp Chucks And Machines Ltd touched a high of ₹69 per share on the NSE and a low of ₹63 per share. As mentioned earlier, the stock was rather volatile, but it did not strike the upper circuit or the lower circuit for the day. For instance, the high price of the day was ₹69 per share, which is marginally lower than the upper circuit limit price of ₹69.30 per share. Similarly, the low price of the day was ₹63 per share, which is marginally above the lower circuit price limit of ₹62.70 per share. The upper and lower circuit limits of 5% on either side from the listing price is the maximum that the stock is allowed to move during the day.

However, the stock remained well within this range on listing day. In fact, the stock enjoyed a strong listing but a close lower due to the pressure on the markets overall. For the day, Nifty was down 17 points and the Sensex was down 65 points. The stock the day lower than the listing price with sellers exceeding the buyers during most part of the day. 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.

Strong volumes for Sharp Chucks And Machines IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Sharp Chucks And Machines Ltd stock traded a total of 15.54 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹1,016.16 lakhs on the first day.  That is above the median volumes that SME IPOs on the NSE get to see on the listing day. 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 below the listing price for the day. It must be noted here that Sharp Chucks And Machines 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, Sharp Chucks And Machines Ltd had a market capitalization of ₹69.40 crore with free-float market cap of ₹18.74 crore. It has a total of 107.60 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 15.54 lakh shares during the day is accounted for only by delivery trades only, barring some market trade exceptions.