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Business News/ Markets / IT cos soar, dull entry for SFBs in IPO mkt
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IT cos soar, dull entry for SFBs in IPO mkt

While Rashi Peripherals managed to open above its issue price and closed higher, Capital Small Finance Bank and Jana Small Finance Bank Ltd, opened below their IPO prices

Mumbai-based Rashi Peripherals opened at ₹339.50 per share on the NSE, well above its issue price of ₹311. (Istockphoto)Premium
Mumbai-based Rashi Peripherals opened at 339.50 per share on the NSE, well above its issue price of 311. (Istockphoto)

Mumbai: Two out of three stocks that listed during a volatile trading session on Wednesday opened below their IPO prices with only one opening at a premium and having closed higher, leaving investors looking for listing gains disappointed.

While Rashi Peripherals Ltd, a distributor of technology brands, managed to open above its issue price and closed higher, the two small finance banks, Capital Small Finance Bank and Jana Small Finance Bank Ltd, opened below their IPO prices.

Mumbai-based Rashi Peripherals opened at 339.50 per share on the NSE, well above its issue price of 311. The stock climbed further, reaching a high of 342.70, before closing at 321.50, This positive response came after strong investor interest, with the IPO subscribed 59.71 times and exceeded the grey market premium, which had dropped from 83 on 8 February to 34 on Wednesday.

Capital Small Finance Bank opened at 430.25 apiece on the NSE, below its issue price of 468. The stock dipped by 10% intraday to 421, before closing down 7% at 435. Similarly, Jana Small Finance Bank opened at 396, below its issue price of 414, and even touched 365, a 12% decline. Despite Capital’s IPO being subscribed 4.17 times and Jana’s 18.50 times, the listing was a tepid one.

“The primary market is currently buoyant, but investors should be cautious in volatile and consolidating markets. For IPO stocks with stretched valuations, profit booking might occur, especially when quarterly results are awaited," Kranthi Bathini, director of Equity Strategy at Wealth Mills Securities Pvt Ltd told Mint.

“However, if recent listings deliver better-than-expected results, these stocks can rebound. Investors who took positions for long-term investment can hold, while those seeking listing gains can consider booking profits when the stock bounces back," he added.

Among these companies, Jana Small Finance Bank has the lowest P/E trailing ratio of 10.15 times. Rashi Peripherals has a P/E trailing ratio of 14.23 times, and Capital Small Finance Bank has the highest P/E trailing ratio of 19.35 times.

“We are immensely grateful to all our investors for their unwavering support and confidence in Rashi Peripherals. As we embark on this exciting journey, we remain steadfast in our dedication to delivering value and driving sustainable growth," said Kapal Pansari, MD, Rashi Peripherals.

Rashi Peripherals raised the largest amount of fresh capital among the three, issuing 1.93 crore new shares for 600 crore. Jana Small Finance Bank followed with 462 crore through a fresh issue of 1.12 crore shares, alongside an offer for sale component of 108 crore. Capital Small Finance Bank’s IPO included a fresh issue of 96 lakh shares for 450 crore and an offer for sale of 15.6 lakh shares for 73.07 crore, bringing its total issue size to 523.07 crore.

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ABOUT THE AUTHOR
Mayur Bhalerao
"Mayur spearheads data-driven reporting on IPOs for Mint. He also covers market trends, and corporate announcements to ensure comprehensive coverage of the financial landscape. Mayur believes in harnessing the power of Bloomberg Terminal and Capital Line to extract and disseminate critical financial data to cross-functional teams within the newsroom and beyond. disseminate critical financial data to cross-functional teams within the newsroom and beyond."
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Published: 14 Feb 2024, 10:15 PM IST
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