Vilin Bio Med IPO lists flat but closes 5% lower

Vilin Bio Med Ltd had a rather tepid listing on 30th June 2023, listing exactly at the issue price but closing a full 5% lower. It was rather ironic because the stock had a weak listing on a day when the markets were exceptionally buoyant. For a long time, the Nifty had struggled to breach above the 19,000 mark. However, on 30th June 2023, the Nifty not only opened above the 19,000 mark but it closed very near to the 19,200 level, having rallied nearly 500 points in just 3 sessions.

The markets were buoyed by factors like the reducing hawkishness of the US Federal Reserve, the RBI rates on pause, sharply lower inflation, better growth prospects, and a current account deficit coming in at just 0.2% of GDP in the fourth quarter of FY23. Above all, the news of the HDFC merger going through in July also helped markets scale higher levels as it would be positive for a number of large companies in terms of additional flows. Despite all this apparent positivity in the market on 30th June 2023, the stock of Vilin Bio Med IPO listed in an extremely tepid fashion, which was evident from tapering GMP.

The stock of Vilin Bio Med Ltd hardly showed any  strength during the day, and closed below the listing price as well as the issue price on the first day of trading on the NSE. It had opened for trade exactly at the IPO price of ₹30. Being an NSE SME IPO, it is only traded on the SME segment of NSE. Vilin Bio Med Ltd opened flat at ₹30 (which is also the fixed IPO price of the stock) but then consistently drifted lower before closing at the 5% lower circuit for the day. With subscription of 4.31X for the retail portion and 1.28X for the HNI / NII portion; the overall subscription was moderate at 2.80X. The subscription was not too exciting compared to other SME stocks on the NSE and that is likely to have disappointed the markets on the listing day.

The SME IPO of Vilin Bio Med Ltd was priced at ₹30 via fixed price format. On 30th June 2023, the stock of Vilin Bio Med Ltd listed on the NSE SME segment at a price of exactly ₹30, which is also the issue price of the IPO. However, through the day, the stock never bounced from these levels but only drifted lower. The opening price of ₹30 also turned out to be the high price of the day and it drifted lower for the day. Eventually, the stock closed at the lower 5% circuit for the day.

On Day-1 of listing i.e., on 30th June 2023, Vilin Bio Med Ltd touched a high of ₹30 on the NSE and a low of ₹28.50 per share. The opening price effectively turned out to be the high point while the stock closed 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 on the day of listing. What is surprising is that the stock showed weakness on a day when the Nifty was sharply higher by 217 points and had broken through some importance resistance levels apart from touching life-time highs. The stock closed at the 5% lower circuit with sellers dominating the buyers through the day. For the SME IPOs, 5% is the lower limit over the listing price on the day of listing.

Let us now turn to the volumes of the stock on the NSE SME IPO segment. On Day-1 of listing, the Vilin Bio Med Ltd stock traded a total of 5,44,000 shares on NSE SME segment amounting to value of ₹160.04 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 pushed the stock to close at the lower end of the circuit filter. It must be noted here that Vilin Bio Med Ltd is in the trade to trade (T2T) segment so only delivery trades are possible on the stock. Hence the entire volume for the day of 5.44 lakh shares as reported on the NSE SME segment purely represents the delivery volumes.

At the close of Day-1 of listing, Vilin Bio Med Ltd had a market capitalization of ₹39.76 crore with free-float market cap of ₹14.11 crore. It has a total of 139.50 lakh shares as the issued capital of the company. As stated earlier, since the trading is on the T2T segment, the entire volume of 5.44 lakh shares during the day is accounted for only by delivery trades. The table below shows the NSE pre-open price for Vilin Bio Med Ltd.

Data Source: NSE

Let us now quickly understand the business model of Vilin Bio Med Ltd. Vilin Bio Med Ltd, is an SME IPO on the NSE which had opened for subscription on 16th June 2023. The company, Vilin Bio Med Ltd, was incorporated in the year 2005, and can boast of a pedigree of nearly 2 decades. The company is engaged in the domestic pharma market as a key manufacturer of pharmaceutical products. It manufactures these products and then sells them in bulk to pharma manufacturers, marketers, and traders. They actually provide the channel for sales to customers. It virtually acts as an outsourcer.

It has a fairly wide product profile which ranges from oral liquids like syrups and suspensions; dry powders as well as tablets and capsules. Both the dry powder and the capsules and tablets are manufactured in Beta and non-Beta Lactam formats. Apart from having its own manufacturing unit in Roorkee in Uttarakhand, Vilin Bio Med Ltd also has own R&D facility in the same place. It is a small sized company with total revenues of just about ₹11.2 crore for the last reported fiscal year ended March 2022.