VELS Film International IPO lists at 2.02% premium, gains further

VELS Film International IPO had a flat listing on 22nd March 2023, listing at a minor premium of 2.02%, but subsequently bounced and closed much above the listing price at the close of trading. In a sense, the markets came under pressure as the Nifty gyrated back and forth during the day, but managed to hold on to the 17,100 mark. However, the stock of VELS Film International Ltd managed to hold on and closed with smart gains for the listing day. For now, the headwinds like the inversion of the yield curve, the negative news flows on banks and the SVB Financial crisis are the major talking points and continue to keep the markets under pressure. In the last few days, the UBS Credit Suisse merger also weighed on the markets on 22nd March 2023. One more X-factor was the outcome of the FOMC meeting to be announced late on 22nd March 2023. However, it must be said that the stock of VELS Film International Ltd managed to hold on for the day quite strong.

The stock of VELS Film International Ltd did show a lot of strength during the day, and closed above the listing price as well as above 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. VELS Film International Ltd opened 2.02% higher and the opening price actually turned out to be the low price point of the day. With subscription of 1.22X for the retail portion and 0.97X for the HNI / NII portion; the overall subscription was quite tepid at 1.10X. The subscription numbers were actually quite tepid but then the stock still managed to list at a decent premium and then sustain the premium post listing to close much higher.

The SME IPO of VELS Film International Ltd was priced at Rs99 via fixed price format. On 22nd March 2023, the stock of VELS Film International Ltd listed on the NSE at a price of Rs101, a premium of 2.02% on the IPO issue price of Rs99. However, the stock bounced sharply from lower levels and it closed the day at a price of Rs1060, which is 7.07% above the IPO price and 4.95% above the listing price of the stock on the first day of listing. In a nutshell, the stock of VELS Film International Ltd had closed the day exactly at the upper circuit price for the stock of 5% with only buyers and no sellers. The upper circuit price on listing day is calculated on the listing price and not on the IPO price. The opening price actually turned out to be the low price of the day.

On Day-1 of listing i.e., on 22nd March 2023, VELS Film International Ltd touched a high of Rs106.05 on the NSE and a low of Rs101 per share. The opening price turned out to be the low point while the stock closed at almost the high point of the day. Incidentally, the closing price also represented the 5% upper 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 truly appreciable is that the stock closed strong despite the overall Nifty being extremely volatile on 22nd March 2023 and the subscription level of the IPO being far from flattering. The stock closed at the 5% upper circuit with only buyers at that price and no sellers. For the SME IPOs, 5% is the upper limit over the listing price on the day of listing as these stocks start off in T2T.

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the VELS Film International Ltd stock traded a total of 14.60 lakh shares on NSE SME segment amounting to value of Rs1,445.32 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. That also helped the stock to close at the upper end of the circuit filter. It must be noted here that VELS Film International Ltd is in the trade to trade (T2T) segment so only delivery trades are possible on the stock. Hence the entire volume (barring some adjustment exceptions) for the day purely represents the delivery volumes. In this case, delivery volumes were 99.58%.

At the close of Day-1 of listing, VELS Film International Ltd had a market capitalization of Rs136.82 crore with free-float market cap of Rs34.70 crore. It has a total of 129.08 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, 99.58% shares during the day is accounted for only by delivery trades.