TVS Supply Chain Solutions IPO lists at 5.1% premium, tapers lower

TVS Supply Chain Solutions IPO had a very moderate listing on 23rd August 2023, listing at a moderate premium of 5.1%, and tapering later to close below the opening price but above the IPO issue price. While the closing price on 23rd August 2023 was still below the opening price of the day, it still closed with a positive show. What is ironic is that the tepid listing came on a day when the markets had been extremely robust. For instance, on 23rd August 2023, the Nifty was up 48 points while the Sensex was up 213 points. Clearly, the stock market enthusiasm did not rub off on the IPO stock listing of TVS Supply Chain Solutions Ltd. The stock opened above the IPO price but gradually tapered through the day to close between the IPO price and the listing price. Both the Nifty and the Sensex had actually put up a very robust performance on 23rd August 2023, but the stock had still languished.

One reason for the stock not picking up momentum during the day could be the rather tepid subscription that the stock of TVS Supply Chain Solutions Ltd got on the day of listing. This is despite the markets being extremely positive on the day. The stock had seen relatively subdued subscription in the IPO. The subscription was just 2.85X  overall and QIB subscription at 1.37X. Hence the listing was expected to be very tepid to weak. It has been observed in the past that the listing day performance has been strongly influenced by the extent of oversubscription to the IPO, especially on the QIB segment. Here is the TVS Supply Chain Solutions Ltd listing story on 23rd August 2023.

TVS Supply Chain Solutions IPO subscription and pricing details

The IPO price was fixed at the upper end of the band at ₹197 which was anyways along expected lines despite the relatively tepid subscriptions that the stock had received. The IPO of TVS Supply Chain Solutions Ltd had seen 2.85X overall subscription and the 1.37X QIB subscription in the IPO. In addition, the retail portion had got subscribed a slightly improved 7.89X in the IPO while the HNI / NII portion also got a subdued subscription of 2.44X. The price band for the IPO was ₹187 to ₹197. On 23rd August 2023, the stock of TVS Supply Chain Solutions Ltd listed on the NSE at a price of ₹207.05, a moderate premium of just 5.1% over the IPO issue price of ₹197. On the BSE also, the stock listed at ₹206.30, a premium of just 4.72% over the IPO issue price of ₹197 per share.

How the stock of TVS Supply Chain Solutions IPO closed on both exchanges

On the NSE, TVS Supply Chain Solutions Ltd closed on 23rd August 2023 at a price of ₹201.10. That is a first day closing premium of 2.08% over the issue price of ₹197 but it is a discount of -2.87% on the listing price of ₹207.05. In fact, the listing price turned out to be very close to the high price of the day and the stock traded for the most part of the trading day below the opening listing price. On the BSE, the stock closed at ₹200.95. That represents a first day closing premium of 2.01% above the IPO issue price but at a discount of -2.59% below the listing price on the BSE. On both the exchanges, the stock listed moderately above the IPO issue price but still managed to close Day-1 marginally below the discovered price.

In fact, the opening price turned out to be very close to the high price of the day on both the exchanges. The high price of the day was just slightly above the closing price on both the exchanges, which could be attributed to some late profit taking in the counter. Clearly, the strong performance of the markets had little impact on the stock on 23rd August 2023 allowing the stock to close the day above the issue price for the day but below the opening price. In short, the late bounce in the market allowed the stock to sustain its morning gains, albeit not being able to a very strong gain in the stock.

Price volume story on the NSE

Let us look at how the stock traversed on the National Stock Exchange (NSE) on 23rd August 2023. On Day-1 of listing, TVS Supply Chain Solutions Ltd touched a high of ₹208.60 on the NSE and a low of ₹199. The premium to the listing price could not sustain through the day, although the premium to the IPO price continued through the day. Mainboard IPOs also do not have any upper circuit or lower circuit of 5%, unlike SME IPOs, which are by default on trade-to-trade basis. If you look at the range of prices, the stock opening price turned out to be very close to the high point of the day while the closing price of the day was evidencing a lot of pressure on the stock.

The tepid post-listing performance of the IPO stock was despite the backing of some very robust markets with the Nifty gaining sharply during the day. On Day-1 of listing, the TVS Supply Chain Solutions Ltd stock traded a total of 241.34 lakh shares on NSE amounting to value of ₹486.92 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers. The stock closed the day with some small buy pending buy orders on the NSE. The table below captures the opening price discovery in the pre-open period on the NSE.

Data Source: NSE

Price volume story on the BSE

Let us look at how the stock traversed on the Bombay Stock Exchange (BSE) on 23rd August 2023. On Day-1 of listing, TVS Supply Chain Solutions Ltd touched a high of ₹208.50 on the BSE and a low of ₹199. The premium to the listing price could not sustain through the day, although the premium to the IPO price continued through the day. Mainboard IPOs also do not have any upper circuit or lower circuit of 5%, unlike SME IPOs, which are by default on trade-to-trade basis. If you look at the range of prices, the stock opening price turned out to be very close to the high point of the day while the closing price of the day was evidencing a lot of pressure on the stock.

The tepid post-listing performance of the IPO stock was despite the backing of some very robust markets with the BSE Sensex gaining sharply during the day. On Day-1 of listing, the TVS Supply Chain Solutions Ltd stock traded a total of 17.59 lakh shares on BSE amounting to value of ₹36.39 crore during the day.  The order book during the day showed a lot of back and forth with the bias clearly in favour of the sellers. The stock closed the day with some small pending buy orders on the BSE. The table below captures the opening price discovery in the pre-open period on the BSE.

Market capitalization, free float, and delivery volumes

While the volumes on the BSE were not as much as on the NSE, the trend was once again the same. The order book through the day showed a lot of moderation with some buying at the end of the day. The sharp bounce in the Nifty and the Sensex from lower levels also helped the stock price to stay robust, although the impact on the returns was still quite minimal. That makes it an ambivalent stock after the listing on Wednesday, although he company, TVS Supply Chain Solutions Ltd is a very sound play on the logistics market.

On the NSE, out of the total 241.34 lakh shares traded during the first day of trading, the deliverable quantity represented 116.68 lakh shares or a deliverable percentage of 48.35% on the NSE, which is around the routine listing day median. That shows a lot of delivery action in the counter. Even on the BSE, out of the total 17.59 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 10.04 lakh shares representing total deliverable percentage of 57.09%, well above the delivery action on the NSE. Unlike the SME segment stocks, which are on T2T on the day of listing, the mainboard IPOs permit intraday trading even on the day of listing.

At the close of Day-1 of listing, TVS Supply Chain Solutions Ltd had a market capitalization of ₹8,789.75 crore with free-float market cap of ₹878.98 crore. TVS Supply Chain Solutions Ltd has issued capital of 43.74 crore shares with a par value of ₹1 per share.