Share at close up 22%

Midfield Industries Limited listed today on the BSE. The issue was for 45 lakh shares in the price band of Rs 126-133. The issue was subscribed 48 times by HNI’s and about 13 times by retail. The total subscription was just under 13 times.

The share listed at Rs 159.40 on the BSE and made a high of Rs 174.90. The low was Rs 150 and this low was made somewhere in the afternoon breaking the low made in the morning which was Rs 153.10. Trading volumes were healthy and were 2.38 cr shares which was 5.3 times the IPO size of 45 lakh shares. Delivery volume of this was 28.85 lakh shares which was 12.01% of the traded volume but a significant 64.11% of the IPO size.

The company is into the steel packaging business and is a competitor to the multinational ITW Signode which was a listed entity a long time ago. The products of the company are in demand and there is plenty of growth opportunity available in the sector domestically and internationally. The new segment within the industry is third party contracts where at the customers end like steel plants one does the packaging using your own material, manpower and machinery. This is a growing segment and offers higher margins than just supplying material. It needs more capital because you need to invest in the machinery to pack the products as well.

The share performed reasonably well yesterday and has virtually closed midway to yesterday’s price range of its high and low. Today would be a crucial day for the share and it would be important for it not to violate the low of yesterday. If it does so we are likely to see some selling pressure while if the reverse happens on the upside, fresh buying is unlikely to come in as at that price of over Rs 175 the share would have gained over 31%.