Piotex Industries IPO: Lists 15.96% higher, then up 4.86%

Modest listing for Piotex Industries Ltd, then close to upper circuit

Piotex Industries Ltd had a very modest listing on 17th May 2024, listing at a premium of 15.96%. After a modest opening, the stock closed the day up 4.86% and very near to the upper circuit over the listing price. For the day, the stock closed above the IPO issue price and the IPO listing price at the close of trading on 17th May 2024. What also stood out about the stock was the modest listing despite the strong overall market sentiments. For the day, the Nifty closed 62 points higher, while the Sensex closed a full 253 points higher. The positive sentiments in the market just happened to give a further boost to the stock of Piotex Industries Ltd on listing day, as it closed near to the upper circuit despite a tepid start.

Subscription and price performance of Piotex Industries Ltd on listing day

Let us now turn to the subscription story of Piotex Industries IPO. With robust subscription of 93.33X for the retail portion, and 115.21X for the HNI / NII portion; the overall subscription was strong at 107.44X. The IPO was a fixed price issue with the IPO price fixed at ₹94 per share. Being a fixed price issue, there was no question of price discovery in this case. Despite a strong listing on 17th May 2024, the stock not only went on to close the day at the upper circuit, but only fell below the listing price of the day marginally. This was reflective of strength in the stock amidst the volatile market sentiments. The subscription impacts the price discovery in fixed price issues in 2 ways. Firstly, the modest subscription ensured that the stock price listing was at a strong premium of 15.96% to the issue price. Secondly, despite volatility in markets, the stock closed at 4.86% higher and very close to the upper circuit for the day.

Stock closes Day-1 near to upper circuit, after a strong listing start

Here is the pre-open price discovery for the SME IPO of Piotex Industries Ltd on the BSE.

Data Source: BSE

The SME IPO of Piotex Industries Ltd was a fixed price IPO and priced at ₹94 per share. On 17th May 2024, the stock of Piotex Industries Ltd listed on the BSE at a price of ₹109 per share, a premium of 15.96% over the IPO issue price of ₹94. However, despite a volatile day post listing on 17th May 2024, the stock of Piotex Industries Ltd closed very near to the upper circuit price of ₹114.30 per share on the BSE SME segment. The stock had an upper circuit limit of ₹114.45 for the day and a lower circuit limit of ₹103.55 per share for the day. In the midst of the volatility in trading during the day, the stock hit the upper circuit but did not dip too much below the listing price, before bouncing back. The stock showed strength after a strong listing and closed near to the upper circuit price of 5%.

The closing price reflects a modestly strong day of trading, because it closed near to the upper circuit despite briefly touching the listing price of the day and going tad below the listing price of the day. Also, the upper circuit comes on top of 15.96% premium listing of the stock. Overall, the closing price of the stock of Piotex Industries Ltd was a full 21.6% above the issue price at the close of the first day of listing on the BSE SME segment. This can be called a commendable listing show, especially considering that the stock had shown signs of volatility in the morning.

Listed in the BSE MT segment for trade in T2T

Being an SME IPO on the BSE, the stock of Piotex Industries Ltd was subjected to 5% circuit filter on listing day and was also in the MT (trade to trade) segment. 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 low price of the day was slightly below the listing price and well above the lower circuit level of the day, while the high price of the day was the upper circuit price of the day. Eventually, the stock closed the day very near to the upper circuit price of the day.

On the BSE, the stock of Piotex Industries Ltd has been admitted to trade in the MT category. The MT category is specifically for the SME segment of the BSE 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 Piotex Industries Ltd on listing day

On Day-1 of listing i.e., on 17th May 2024, Piotex Industries Ltd touched a high of ₹114.45 per share on the BSE and a low of ₹108.10 per share. The high price of the day was exactly the upper circuit limit price of the stock while the stock low price of the day was slightly below the listing price, and well above the lower circuit of the day. Between these two prices, the stock was relatively volatile and eventually closed at the upper circuit price of the day. In fact, the stock can be said to have enjoyed a modest listing despite a robust performance for the day by the Nifty and Sensex. Piotex Industries Ltd closed near to the 5% upper circuit on top of a strong premium listing on the BSE.

During the trading day, the stock of Piotex Industries Ltd opened above the issue price and closed very near to the upper circuit price. In terms of the circuit filter limits, the stock of Piotex Industries Ltd had an upper circuit filter limit of ₹114.45 per share and a lower circuit band limit of ₹103.55 per share. The stock closed the day 21.6% above the IPO issue price of ₹123 per share and it also closed 4.86% above the listing price of the day at ₹109 per share. During the day, the stock of Piotex Industries Ltd hit the upper circuit and stayed locked in the upper circuit for some part of the day before edging slightly lower. However, the listing price turned out to be near to the low price of the day as the stock stayed well clear of the lower circuit price of the day. The stock closed strong near to the upper circuit with unmet buy quantity and no sellers in the counter. For the SME IPOs on the BSE, 5% is the upper limit and also the lower circuit on the listing price.

Robust volumes for Piotex Industries Ltd on listing day

Let us now turn to the volumes of the stock on the BSE. On Day-1 of listing, the Piotex Industries Ltd stock traded a total of 10.24 lakh shares on BSE SME segment amounting to trading value (turnover) of ₹1,136 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 led the stock to close with pending buy orders (unmet) at the end of the trading session. It must be noted here that Piotex Industries 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, barring some minor shifts for error trades adjustment.

At the close of Day-1 of listing, Piotex Industries Ltd had a market capitalization of ₹58.33 crore with free-float market cap of ₹17.50 crore. As stated earlier, since the trading is on the T2T segment (MT segment of BSE), the entire volume of 10.24 lakh shares during the day is accounted by delivery trades only, barring some error trade exceptions in the market. The stock trades on the BSE SME segment under the trading code (544178) and will be available in the demat account under ISIN code (INE0R4W01015). The stock has a face value of ₹10 per share.

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 cap overall to the IPO size. Piotex Industries Ltd had a market cap of ₹58.33 crore and the issue size was ₹14.47 crore. Therefore, the Market cap contribution ratio of the IPO works out to 4.03 times; which is lower than the median. 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.