Tijaria Polypipes Limited listed on the stock exchanges on Friday and as expected the listing turned out to be a complete disaster. The company had come out with a fixed price issue for 1 crore shares at Rs 60 each to raise Rs 60 crs. The issue was open between the 27th and 29th of September. The issue was subscribed 1.2 times with retail portion receiving excellent support. This company chose not to have any road shows for its IPO anywhere in the country. Actually the merchant banker of the company Hem Securities has a practice of not having any road shows and certainly not in Mumbai, the financial capital of the country. The merchant banker also brings only fixed price issues so the response to the issue is not available for public viewing.
The share listed at Rs 62 on the BSE and Rs 61 on the NSE. The high of the day was Rs 67.80 on the BSE and Rs 67.75 on the NSE. The low was Rs 16.05 on the BSE and Rs 16.50 on the NSE. The close was Rs 18.10 on the BSE and Rs 18.60 on the NSE.
It may be mentioned here that the company raised Rs 60 crs and the market capitalisation of the company at the issue price was Rs 141.75 crs. The same at the end of the day was Rs 42.76 crs which is a significant 29% less than the amount raised by the company. One expects that the money which would have been transferred from the escrow account to the companies account could not have been spent in one day.
| Exchange | Open | High | Low | Close | Net Change | % Gain/loss | Wt. Avg | Volume | Delivery | Del %age |
| BSE | 62.00 | 67.80 | 16.05 | 18.10 | -41.90 | -69.83 | 44.15 | 47475546 | 3579436 | 7.54 |
| NSE | 61.00 | 67.75 | 16.50 | 18.60 | -41.40 | -69.00 | 43.94 | 59965008 | 6176796 | 10.30 |
| Total | 107440554 | 9756232 | 9.08 |
The traded volume on the counter was huge and 1074.40 lac shares were traded on day one which is a staggering 10.74 times the IPO size of 1 crore shares. The delivery volume was 97.56 lac shares which was 9.08% of the traded volume but a very significant 97.56% of the IPO size. What this means that almost every single person who had applied for shares in this company has sold the shares on day one. The weighted average of the day’s trade is Rs 44.15 on the BSE and Rs 43.94 on the NSE indicating that once the required shares were sold after maintaining the price by the “friendly intermediary”, he just dumped the balance as he couldn’t care less what happened. The difference between the weighted average and the closing price is a staggering Rs 26.05 on the BSE which is 43.4% of the issue price.
The stock opened steady and till 12 noon was rock steady at around the issue price itself. With no offence to anybody the clock striking 12 noon and the stock began to fall. In less than 15 minutes the stock had fallen to around Rs 42-44 and this was happening on huge volumes as is visible from the chart appended above. Thereafter the stock attempted to recover and gained to about Rs 55. Around 1.30 pm the second fall came which saw the share fall to Rs 30 in a span of 40-45 minutes. It held at these levels for 15 to 20 minutes and then again fell, this time taking the stock to Rs 20. By 3 pm the story was all over and then the stock made its low and closed on a weighted average close at Rs 18.10 on the BSE and Rs 18.60 on the BSE.
In conclusion, one can only say that it was one more IPO, one more listing and one more disaster. It’s time the regulator took note of what’s happening in the market place and the nexus between promoter-merchant banker-friendly intermediaries is investigated and action taken. The fact that the mighty government of India postpones its FPO of ONGC 48 hours before the road shows are to begin citing poor market conditions and these issues sail through with impunity is indeed a tragedy.
The record book will say that there was one more IPO which came and was subscribed with the help of “friendly intermediaries” and as is to be expected crashed on day one losing 70% of its value. Heaven help investors who apply in such shares and also those who get trapped subsequently.
