Utkarsh Small Finance Bank IPO lists at 60% premium, then hits upper circuit

Strong listing even in a weak market

Utkarsh Small Finance Bank IPO had a very strong listing on 21st July 2023, listing at a smart premium of 60%, and then closing at the day at the 20% upper circuit over the opening price. The strong demand in the IPO translated into robust listing performance, despite the fact that the listing day was pulled back by a day and despite the overall markets being extremely weak on 21st July 2023. One almost venture to say that the stock had select a wrong day to list as the Nifty was down 234 points and the Sensex was down nearly 888 points on Friday. It was also a bit of the Friday effect as traders chose to go light over the weekend. While the stock did show some bouts of volatility during the day, it closed exactly at the upper circuit of the day or 20% above the listing price on the first day of trading on the NSE. It also closed substantially above the IPO price. With subscription of about 110.77X  overall and QIB subscription at 135.71X, the listing was expected to be a bumper listing. However, the resilience of the stock was evident in the stellar performance on the day of listing. Here is the Utkarsh Small Finance Bank Ltd listing story on 21st July 2023.

The IPO price was fixed at the upper end of the band at ₹25 per share which was anyways obvious considering the stellar oversubscription for the issue. The subscription was 110.77X overall and the 135.71X QIB subscription in the IPO. In addition, the retail portion had got subscribed 78.38 times while the HNI / NII portion got subscribed 88.74 times. The price band for the IPO was ₹23 to ₹25. On 21st July 2023, the stock of Utkarsh Small Finance Bank Ltd listed on the NSE at a price of ₹40, a substantial premium of 60% over the IPO issue price of ₹25. On the BSE also, the stock listed at ₹39.95, a premium of 59.8% over the IPO price.

Price moves on the NSE and the BSE

On the NSE, Utkarsh Small Finance Bank Ltd closed on 21st July 2023 at a price of ₹48 per share. That is a first day closing premium of 92% over the issue price of ₹25 and a premium of 20% on the listing price of ₹40. In fact, the listing price turned out to be very close to the low price of the day and the stock traded most part of the day above the IPO listing price. On the NSE, the stock of Utkarsh Small Finance Bank IPO closed exactly at the upper circuit of 20% over the listing price.

On the BSE, the stock closed at ₹47.94. That represents a first day closing premium of 91.76% above the issue price of the IPO and also a premium of 20% above the listing price on the Bombay Stock Exchange of ₹39.95 per share. On both the exchanges, the stock listed substantially above the IPO issue price and gained further traction to close exactly at the 20% upper circuit for the day. In fact, the high of the day was the close of the day and also the 20% upper circuit price on the stock. The low was marginally below the opening price of the stock, although the volatility was limited and the bias was towards the buy side of the stock. Clearly, the very strong subscription had its positive impact on the first day of listing as there was a rush add positions in the stock after the very strong opening. This was all the more appreciable considering that it came on the back of a day when the markets were extremely weak overall.

Utkarsh Small Finance Bank hits upper circuit on both exchanges

Let us talk about the price movement on the NSE during the day first. On Day-1 of listing, Utkarsh Small Finance Bank Ltd touched a high of ₹48 on the NSE and a low of ₹37.20 per share. The premium over the IPO price sustained through the day and even the premium over the listing price persisted for most part of the day. In fact, if you look at the range of prices, the stock opening price turned out to be just above the low point of the day and the stock closed exactly at the high point of the day, which was also the level at which the stock hit the 20% upper circuit over the opening price. This tremendous display of price strength was despite the fact that the Nifty fell 234 points during the day. On Day-1 of listing, the Utkarsh Small Finance Bank Ltd stock traded a total of 2,654.61 lakh shares on NSE amounting to value of ₹1,146.79 crore on the first day.  The order book during the day showed a lot of buying with the buy orders far exceeding the sell orders at any point of time. The support accentuated in the last hour as it closed with more than 34 lakh shares buy order pending at the close of trading on 21st July 2023.

Let us now turn to the price movement on the BSE during the day of listing for Utkarsh Small Finance Bank Ltd. On Day-1 of listing, Utkarsh Small Finance Bank Ltd touched a high of ₹47.95 on the BSE and a low of ₹37.25 per share. The premium over the IPO price sustained through the day and even the premium over the listing price persisted for most part of the day. In fact, if you look at the range of prices, the stock opening price turned out to be just above the low point of the day and the stock closed exactly at the high point of the day, which was also the level at which the stock hit the 20% upper circuit over the opening price. This tremendous display of price strength was despite the fact that the Sensex fell 888 points during the day. On Day-1 of listing, the Utkarsh Small Finance Bank Ltd stock traded a total of 151.58 lakh shares on BSE amounting to value of ₹66.57 crore on the first day.  The order book during the day showed a lot of buying with the buy orders far exceeding the sell orders at any point of time. The support accentuated in the last hour as it closed with a substantial shares buy order pending at the close of trading on 21st July 2023.

A day of high volumes on NSE and BSE for Utkarsh SFB

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 buying support with the buy orders far exceeding the sell orders at any point of time. That made it a classic buy on dips stock through the day. However, this can also be attributed to the strong subscription and the reasonable valuations which allowed the stock to hold up even on a weak trading day. On the NSE, out of the total 2,654.61 lakh shares traded during the first day of trading, the deliverable quantity represented 923.52 lakh shares or a deliverable percentage of 34.79% on the NSE. That shows a lot of delivery action. Even on the BSE, out of the total 151.58 lakh shares of quantity traded, the deliverable quantity at a gross across client level was 69.66 lakh shares representing total deliverable percentage of 45.96%.

At the close of Day-1 of listing, Utkarsh Small Finance Bank Ltd had a market capitalization of ₹5,253.77 crore with free-float market cap of ₹577.91 crore.