Spectrum Talent Management SME-IPO lists at -10.4% discount, falls further

Spectrum Talent Management IPO had a relatively weak listing on 22nd June 2023, listing at a sharp discount of -10.4%, only to taper further and close below even the listing price of the IPO. In the last few days, the Nifty has been playing truant with the level of 18,800 and this time around the pressure was visible on the stock markets on Thursday as the stock opened at a discount on the first day of the IPO and tapered further. The level of 18,800 once again proved to be a resistance for the market and it corrected from higher levels to close nearly 86 points lower on Thursday. The subscription levels of Spectrum Talent Management Ltd were not too spectacular and that was reflected in the post listing performance of the company on the day of IPO listing.

The stock of Spectrum Talent Management Ltd did display a good deal of weakness during the day, and closed the day below 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. Spectrum Talent Management Ltd opened -10.4% lower and the opening price turned out to be the high price for the day. With subscription of 11.21X for the QIB segment, 13.10X for the retail portion and 11.68X for the HNI / NII portion; the overall subscription was relatively moderate at 12.27X.

The subscription may not be earth shattering but it was a moderately good performance. However, despite the moderate subscription numbers, the stock listed at a discount on the bourses and then sustain the discount post listing, reflecting the weak sentiments in the market overall. The table below captures the gist of the oversubscription of the issue of Spectrum Talent Management Ltd across various investor categories.

The SME IPO of Spectrum Talent Management Ltd was priced at ₹173 via book building format and the above price reflected the upper end of the price band. On 22nd June 2023, the stock of Spectrum Talent Management Ltd listed on the NSE at a price of ₹155, a discount of -10.4% on the IPO issue price of ₹173. However, the stock lost ground from the opening levels and it closed the day at a price of ₹147.25, which is -14.88% below the IPO price and 5% below the listing price of the stock on the first day of listing. In a nutshell, the stock of Spectrum Talent Management Ltd had closed the day exactly at the lower circuit price for the stock of 5% with only sellers and no buyers. The lower circuit price (like the upper circuit price) on listing day is calculated at 5% variance over the listing price and not on the IPO price. The opening price actually turned out to be the high price of the day while the closing price turned out to be the low point of the day in trading.

On Day-1 of listing i.e., on 22nd June 2023, Spectrum Talent Management Ltd touched a high of ₹155 on the NSE and a low of ₹14147.25 per share. The opening price turned out to be the high point for the day while the stock closed exactly at the low point of the day. Incidentally, the closing price also represented the 5% lower 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 perhaps the market reality is that the stock closed strong largely in sync with the overall Nifty falling by 86 points on 22nd June 2023 and dipping below the psychological level of 18,800 on a closing basis for the listing day. The stock closed at the 5% lower circuit with 41,600 sell quantity and no buyers. For the SME IPOs, 5% variation from the listing price of the day is the is the upper limit as well as the lower limit for the stock on either side.

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Spectrum Talent Management Ltd stock traded a total of 10,60,000 shares on NSE SME segment amounting to value of ₹1,630.81 lakhs on the first day. The order book during the day showed a lot of selling with the sell orders consistently exceeding the buy orders at any point of time. That also resulted in the stock to close at the lower end of the circuit filter. It must be noted here that Spectrum Talent Management Ltd is in the trade to trade (T2T) segment so only delivery trades are possible on the stock. Hence the entire volume of 10.60 lakh shares for the day purely represents the delivery volumes.

At the close of Day-1 of listing, Spectrum Talent Management Ltd had a market capitalization of ₹340.05 crore with free-float market cap of ₹88.41 crore. It has a total of 230.93 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 10.60 lakh shares during the day is accounted for only by delivery trades.

Spectrum Talent Management Ltd, is an SME IPO on the NSE which had opened for subscription on 09th June 2023 and closed for subscription on 14th June 2023. The company, Spectrum Talent Management Ltd, was incorporated in 2012 to provide high quality human resource and staffing services to corporates. Spectrum Talent Management Ltd boasts of over 275 corporate and institutional clients serviced over the years; both in the domestic and the offshore market. It employs more than 15,600 personnel deployed across various locations of its clients.

The company was promoted by two veterans of the staffing and HR services space; Vidur Gupta and Sidharth Agarwal; sharing a combined experience of more than 28 years in the staffing vertical. In terms of its service offerings, Spectrum Talent Management Ltd offers an array of services across payroll, recruitment, onboarding, and facilitating flexible staffing. The business model of Spectrum Talent Management Ltd is aimed at satisfying the staffing, and recruitment needs of clients with their specialized knowledge, domain skills and their networks spread across the industry, domestically and globally.

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