Two listings - both at premium

about 7 months ago
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There were two new listings today. First is Delhivery, which against the IPO price of Rs.487, it got listed at Rs.493 and it went up to Rs.546.40 and is now trading at Rs.535 levels currently.

The IPO had received a lukewarm response, subscribing 1.63x, with QIBs portion subscribing 2.66x, retail investors by 0.57x and HNIs by 0.3x. Clearly, QIBs helped the issue sail through.

In our New Issue Analysis, we had concluded, “Logistics market opportunity is large, but highly competitive, given negligible barriers to entry. Market investors are in no mood to lend an ear to the ‘likely turn-around’ stories of loss-making new-age businesses. Current market conditions calls for extreme skepticism, as even the ‘poster-boy’ for new-economy stocks in India, Zomato, was down 25% from IPO price yesterday, that too in less than a year.”

The other new listing was Venus Pipes. As against the IPO price of Rs.326, the stock got listed at Rs.335, a 4% premium and soon went on to hit the 5% UC of the day at Rs.351.75, where it now remains frozen.

The IPO had got a good response, subscribing 16.31x, with retail portion taking the lions share at 19.04x, followed by HNIs at 15.69x and QIBs at 12.02x.

In our IPO Analysis, we had concluded, “Venus’ expansion will come onstream only after a year, while current pricing more than discounts all possible future growth, making the IPO an ‘avoid’.” And despite the listing gains we see today, this verdict based on our analysis, remains intact.

354.10 (+5.25)
724.45 (+10.15)

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