Docmode Health Technology IPO Lists 140.82% higher, closes at -5% lower circuit

Bumper listing for Docmode Health Technologies Ltd, then lower circuit

Docmode Health Technologies IPO had a bumper listing on the NSE, listing at ₹190.25 per share; an amazing premium of 140.82% to the issue price of ₹79 per share on 02nd February 2024. However, after a bumper opening, the stock struggled under the selling pressure and closed the day at the -5% lower circuit on the listing price. Despite the lower circuit on the stock during the day, the stock of Docmode Health Technologies Ltd still closed at a substantial premium of 128.80% over the IPO issue price, although it did close at a discount of -5% to the listing price of ₹190.25 per share. The closing price of the day was ₹180.75 per share.

The stock closed in the lower circuit for the day, despite the strong premium listing and despite the Nifty and the Sensex closing with robust gains for the day. Despite the flattering market Nifty performance, the stock of Docmode Health Technologies Ltd still closed at the -5% lower circuit at the close of 02nd February 2024. It must be noted here that the Nifty and Sensex were sharply in the positive on Friday, 02nd February 2024; with the Nifty gaining 156 points in the day and the Sensex gaining about 440 points in the day. During the day, the Nifty and the Sensex were volatile with a sharp upward bias, and hence managed to close with sharp gains for the day. Despite the supportive environment in the market, the stock of Docmode Health Technologies Ltd, after a bumper listing, ended up closing at the lower circuit of the day.

Mega Subscription levels, and how it impacted listing of Docmode Health Technologies Ltd

Let us now turn to the subscription story of Docmode Health Technologies Ltd. With mega subscription of 230.38X for the retail portion, and 194.90X for the non-retail HNI / NII portion; the overall subscription was extremely huge at 215.24X. The IPO was a book fixed price issue with the IPO price fixed at of ₹79 per share. Being a fixed price issue, there was no price band related decision that had to be taken post the closure of the book. The stock listed with bumper gains of 140.82% on the NSE. However, subsequently, due to the stock opening so much higher than the issue price and due to the general caution in the markets overall, the stock of Docmode Health Technologies Ltd went on to close at the lower circuit of -5% on the listing price on 02nd February 2024.

This was reflective of caution in the stock at higher levels, on a day when overall market sentiments were actually quite strong. The subscription normally impacts the price discovery in book building issues and the listing price. Being a fixed price issue, there was no scope of any impact on the price discovery. On the day of listing, the stock managed to get a bumper opening of 140.82% over the IPO issue price of ₹79 per share. However, eventually, the stock went on to close the day at the -5% lower circuit on the listing price of ₹190.25 per share. The stock closed the day at ₹180.75 per share.

Stock closes Day-1 at lower circuit, after a bumper listing

Here is the pre-open price discovery for the SME IPO of Docmode Health Technologies IPO on the NSE.

Data Source: NSE

The SME IPO of Docmode Health Technologies Ltd was a fixed price issue priced at ₹79 per share. On 02nd February 2024, the stock of Docmode Health Technologies Ltd listed on the NSE at a price of ₹190.25per share, which is a whopping premium of 140.82% over the IPO price. However, amidst a volatile day post listing on 02nd February 2024, the stock of Docmode Health Technologies Ltd closed exactly at the lower circuit price of ₹180.75 per share. The stock had an upper circuit limit of ₹199.75 per share for the day and a lower circuit limit of ₹180.75 per share for the day of listing i.e., 02nd February 2024.

In the midst of the volatility in trading during the day, the stock price did manage to go above the listing price, and even briefly touched the upper circuit for the day. Through the better part of the trading day on 02nd February 2024 the stock traded under the listing price; in fact, being locked in the lower circuit for most part of the day. The closing price reflects a mixed day of trading, because it closed at the lower circuit after a bumper opening for the day and after staying below the listing price during most of the trading session. However, this lower circuit comes after a very strong listing on a day when the Nifty and the Sensex closed with gains of 156 points and 440 points respectively; amidst a lot of market volatility and FPI selling.

Trade to Trade (ST) category SME listing

Being an SME IPO on the NSE, the stock of Docmode Health Technologies Ltd was subjected to 5% circuit filter either side on listing day and was also placed in the ST (trade to trade) segment, specifically for SME stocks. That means, only delivery trades are permitted on the stock. Like the upper circuit price, even the lower circuit price on listing day is calculated on the listing price and not on the IPO price. The opening price of the day was at a substantial premium of 140.82% over the issue price of ₹79 per share. During the day, the stock was volatile at opening but never really seriously got to stay above the listing price and remained under that price, eventually closing at the lower circuit price. In fact, the stock was locked in lower circuit for most part of the day on 02nd February 2024. On the NSE, the stock of Docmode Health Technologies Ltd has been admitted to trade in the ST category. The ST category is specifically for the SME Emerge segment of the NSE with compulsory trade to trade settlement. On such stocks, netting of positions is not permitted and every trade has to be settled by delivery only.

How prices traversed for Docmode Health Technologies Ltd on listing day

On Day-1 of listing i.e., on 02nd February 2024, Docmode Health Technologies Ltd touched a high of ₹199.75 per share on the NSE and a low of ₹180.75 per share. The high price of the day was above the listing price of ₹190.25 per share but for most part of the day the stock stayed below the listing price. The high price of the day was exactly at the upper circuit price of ₹199.75 per share. However,  the stock closed at the lower circuit price of ₹180.75 per share. Between these two extreme prices, the stock was relatively less volatile and eventually closed at the lower circuit price of the day. However, it is rather uncommon for a stock to close at the lower circuit after getting such a robust listing in the morning.

In terms of the circuit filter limits, the stock of Docmode Health Technologies Ltd had an upper circuit filter limit of ₹199.75 and a lower circuit band limit of ₹180.75. The stock closed the day 128.80% above the IPO issue price of ₹70 per share but the stock also closed -5% below the listing price of the day. However, the stock touched the lower circuit price of the day and spent most part of the day locked at lower circuit. The stock closed under pressure at the lower circuit at the close of the day with sell quantity of 1,600  shares and no buyers in the counter on the NSE. For the SME IPOs, it may be recollected, that 5% is the upper limit and also the lower circuit limit on the listing price on the day of listing. This circuit is not contingent on the issue price in any way.

Robust volumes for Docmode Health Technologies Ltd on listing day

Let us now turn to the volumes of the stock on the NSE. On Day-1 of listing, the Docmode Health Technologies Ltd stock traded a total of 5.856 lakh shares on NSE SME segment amounting to trading value (turnover) of ₹1,117.85 lakhs on the first day. The order book during the day showed a lot of volatility with the sell orders consistently exceeding the buy orders at any point of time post the bumper listing. That also led the stock to close at the lower circuit of the day with pending sell orders of 1,600 shares at the end of the trading session, although the price was hardly volatile during the day. It must be noted here that Docmode Health Technologies 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 purely represents the delivery volumes.

At the close of Day-1 of listing, Docmode Health Technologies Ltd had a market capitalization of ₹56.81 crore with free-float market cap of ₹29.86 crore. It has a total of 31.428 lakh shares as the issued capital of the company and a face value of ₹10 per share. As stated earlier, since the trading is on the T2T segment, the entire volume of 17.89 lakh shares during the day is accounted by delivery trades only, barring some market trade exceptions in the market. The stock trades on the NSE SME segment under the trading code (DHTL) and will be available in the demat account under ISIN code (INE0OGG01015).

IPO size to Market cap contribution ratio

One way to assess the significance of the IPO on the market cap of the segment is the ratio of market overall to the IPO size. Docmode Health Technologies Ltd had a market cap of ₹56.81 crore and the issue size was ₹6.71 crore. Therefore, the Market cap contribution ratio of the IPO works out to a healthy 8.47 times. Remember, this is not the ratio of the market cap to original book value, but the ratio of the market cap created to the size of the IPO. That shows the significance of the IPO to the overall market cap accretion of the stock exchange.