Srivasavi Adhesive Tapes IPO lists at 2.44% discount, but bounces

Srivasavi Adhesive Tapes IPO had a flat to negative listing on 09th March 2023, listing at a marginal discount of -2.44%, but subsequently managed to bounce back and settle above the issue price of Rs41 for most part of the day. In a sense, the markets came under pressure after the Indian yield curve went into a negative slope for the first time since 2015, but despite that the stock managed to hold in the green and the Nifty closed nearly 165 points lower.

The stock of Srivasavi Adhesive Tapes Ltd did show some bouts of volatility during the day, but closed above the listing price and 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. With subscription of about 8.38X for the retail portion and 7.12X for the HNI / NII portion, the overall subscription for the IPO stood at 7.75X. While this should have helped a much better listing, the weak sentiments in the market, probably, hampered the sentiments in the market.

The SME IPO of Srivasavi Adhesive Tapes Ltd was a fixed price issue with the price fixed at Rs41 per share. On 09th March 2023, the stock of Srivasavi Adhesive Tapes Ltd listed on the NSE at a price of Rs40, a marginal discount of -2.44% on the IPO issue price of Rs41. However, the stock bounced sharply from lower levels and it closed the day at a price of Rs42, which is 2.44% above the IPO price and 5% above the listing price of the stock on the first day of listing.

On Day-1 of listing i.e., on 09th March 2023, Srivasavi Adhesive Tapes Ltd touched a high of Rs.42 on the NSE and a low of Rs.38.10 per share. Incidentally, the closing price also represented the high price of the stock for the day. What is truly appreciable is that the stock closed strong despite the overall Nifty falling by nearly 165 points on 09th March 2023. The stock closed at the 5% upper circuit with 30,000 buy quantity and no sellers. For 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. On Day-1 of listing, the Srivasavi Adhesive Tapes Ltd stock traded a total of 14.04 lakh shares on NSE SME segment amounting to value of Rs569.74 lakhs on the first day. The order book during the day showed a lot of buying with the buy orders consistently exceeding the buy 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 that Srivasavi Adhesive Tapes Ltd is in the trade to trade (T2T) segment so only delivery trades are possible on the stock.

At the close of Day-1 of listing, Srivasavi Adhesive Tapes Ltd had a market capitalization of Rs.5,953.15 crore with free-float market cap of Rs.1,607.35 crore. It has a total of 141.74 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 14.04 lakh shares during the day is accounted for only by delivery trades.

Srivasavi Adhesive Tapes Ltd is a 13-year old company engaged in manufacturing, coating, converting, and Die cuts of industrial Specialty self-adhesive tapes. It caters to user segment industries like automotive, locomotives, aerospace, defence, electronics, renewable Energy, FMCG, infrastructure etc. Some of the major products in its portfolio include BOPP tapes, eco-friendly paper tapes, filament tapes, double side tapes, specialty protection tapes, surface protection tapes, Masking tapes etc. It has a vast domestic and international market, with domestic business spread across 22 states, and international export business across the US, UAE, Egypt, Franc, Kuwait, Poland, Qatar, Spain etc.

Srivasavi Adhesive Tapes Ltd plans to use the funds raised through the IPO for funding the working capital needs of the company and for general corporate purposes. Post the IPO, the promoter share in equity will dilute from 99.84% to 73.21%. The issue was lead managed by Shreni Shares Private Limited, while Bigshare Services Private Limited is be the registrars to the issue.