Sheetal Universal IPO debuts 7.14% higher, closes flat

Premium listing for Sheetal Universal IPO, closes flat

Sheetal Universal IPO had a modest listing on 11th December 2023, listing at a premium of 7.14%. After a modest opening, the stock touched the 5% upper circuit over the listing price during the trading day, but eventually closed flat, exactly at the listing price. For the day, the stock closed comfortably above the IPO issue price but exactly at the listing price at the close of trading on 11th December 2023. What helped the performance of the stock was the market support with the Nifty and the Sensex gaining small but sure during the day. On 11th December 2023, the Nifty closed 28 points higher while the Sensex closed 103 points higher.

In the last few days, the Nifty has been volatile but has managed to hold the 21,000 mark during the week and that is what matters to the market. Today, the Nifty closed at 20,997 mark. The strength in the Nifty and the Sensex is on the back of follow-up buying in Indian markets after the Indian GDP came in better than expected at 7.6% and this was followed up by the RBI maintaining status quo on rates in the last policy statement of the year and also raising the GDP estimates by 50 bps to 7.0% for FY24. The outcome of the assembly elections has also been positive for the markets as a whole.

Subscription and price performance of Sheetal Universal IPO on listing day

Let us now turn to the subscription story of Sheetal Universal IPO. With hefty subscription of 129.73X for the retail portion, and 212.55X for the HNI / NII portion; the overall subscription was extremely healthy at 179.20X. The IPO was a fixed price IPO issue with the IPO price fixed at ₹70 per share. Thanks to the robust response to the IPO, the listing price was above the IPO price for the stock. The stock listed at a modestly positive premium of 7.14%,. However, subsequently, despite the stock seeing some volatility in the early parts of the day, it went on to close absolutely flat, exactly at the listing price of ₹75 per share.

This was reflective of resilience in the stock amidst the improving market sentiments. The subscription normally impacts the price discovery in book building issues and the listing price. In this case, since it was a fixed price IPO, there was little impact that the subscription could have on the pricing. However, it must be said that the stock managed to list at a modest premium and also close the day flat, exactly at the listing price of the day, despite the volatility in the market overall and also the volatility in the stock during the day.

Stock closes Day-1 flat, after a modestly strong start

Here is the pre-open price discovery for the Sheetal Universal IPO on the NSE.

Data Source: NSE

Sheetal Universal IPO was priced at ₹70 per share, being the fixed price in the fixed price IPO. On 11th December 2023, the stock of Sheetal Universal Ltd listed on the NSE at a price of ₹75.00 per share, a premium of 7.14% over the IPO issue price of ₹70 per share. However, despite a volatile day post listing on 11th December 2023, the stock of Sheetal Universal Ltd closed exactly at the listing price of ₹75 per share. The stock had an upper circuit limit of ₹78.75 for the day and a lower circuit limit of ₹71.25 for the day. In the midst of the volatility in trading during the day, the stock hit the upper circuit but could not hold itself at the upper circuit price for the better part of the day.

The closing price reflects an initial show of strength but subsequent tapering of the stock as it closed the day exactly at the listing price, even after it touched the upper circuit price during the day. However, the listing price of ₹75 per share was also the low point of the day and the stock never really went below the listing price of the day, a sign of resilience. Also, the flat closing comes on top of a 7.14% premium listing of the stock, which is all the more appreciable, considering that the Nifty and the Sensex had only been moderately in the positive on the day of listing of Sheetal Universal Ltd. More importantly, the stock never went below the listing price, despite giving up gains from the upper circuit levels.

Circuit filters on NSE SME Trade to Trade segment (ST)

Being an SME IPO on the NSE, the stock of Sheetal Universal 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 or above the listing price. Even though the stock touched the upper circuit during the day, it gave up gains and closed flat, exactly at the listing price. However, the stock never dipped below the listing price through the day. On the NSE, the stock of Sheetal Universal 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 Sheetal Universal Ltd on listing day

On Day-1 of listing i.e., on 11th December 2023, Sheetal Universal Ltd touched a high of ₹78.78 per share on the NSE and a low of ₹75 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 of the session. Between these two extreme prices, the stock was relatively volatile and eventually closed at the listing price of the day. In fact, the stock can be said to have enjoyed a modestly strong listing and largely supported by a 28 points rally in the Nifty and a 103 points rally in the Sensex.

For the whole trading day, the stock never really dipped below the listing price of ₹75 per share, which also turned out to be the low price of the day. In terms of the circuit filter limits, the stock of Sheetal Universal Ltd had an upper circuit filter limit of ₹78.75 and a lower circuit band limit of ₹71.25. The stock closed the day 7.14% above the IPO issue price of ₹70 per share but it closed exactly at the listing price of the day at ₹75 per share. During the day, the stock of Sheetal Universal Ltd hit the upper circuit and stayed locked for some time before the gains petered out and the stock ended up at the listing price.

It never really dipped below the listing price of the day, leave alone getting close to the lower circuit price of the day; and that was a signal of resilience in a volatile market. The stock closed modestly strong at the listing price of the day after briefly touching the upper circuit. There were 2,000 buy quantity and no sellers in the counter at close. For the SME IPOs, it may be recollected, that 5% is the upper limit and the lower circuit on listing price on day of listing.

Robust volumes for Sheetal Universal IPO on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Sheetal Universal Ltd stock traded a total of 24.14 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹1,827.64 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. However, the stock did see selling pressure at higher levels.

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 Sheetal Universal 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, Sheetal Universal Ltd had a market capitalization of ₹85.92 crore with free-float market cap of ₹28.52 crore. It has a total of 114.56 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 24.14 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market. On the SME segment of the NSE, the stock of Sheetal Universal Ltd is traded under the symbol “SHEETAL” and the shares will be held in the demat account under ISIN Number “INE04VX01019”.