Amber Enterprises India Limited Listing Day – Gains Over 44% But Leveraged Investor Loses

Shares of Amber Enterprises India Limited listed on the bourses on Tuesday the 30th of January and gained 44% but leveraged investors are at this stage are losing money. Amber Enterprises had tapped the capital markets with its issue to raise fresh capital of Rs 475 crs and an offer for sale of Rs 125 crs. The price band was Rs 855-859.

The company had allotted 20,80,459 equity shares to 15 anchor investors comprising of 20 entities. The issue had received excellent response and was oversubscribed 165 times. The QIB portion was subscribed 175 times, HNI 519 times and Retail 11.65 times. There were 14.55 lakh applications received.

The discovered price on the BSE was Rs 1,180 while it was Rs 1,175 on the NSE. The share thereafter made its low at Rs 1114.10 on the BSE and Rs 1115 on the NSE and then recovered substantial ground. It then made a high of Rs 1263 on the BSE and Rs 1269 on the NSE. The closing price at the BSE was Rs 1237.25, a gain of Rs 378.25 or 44.03%. On the NSE the gain was Rs 386.25 or 44.97%. The cost of funding was between Rs 422-465 which means that leveraged investors lost money. One wonders whether the leveraged investor is in some way responsible for the high pricing, the grey market premium and subsequent profits and losses. Its time someone looked at the same more deeply as it is affecting the very balance of primary markets.

Exchange Open High Low Close Net Change % Gain/ Loss Wt.Avg Volume Delivery Del %age
BSE 1180.00 1263.00 1114.10 1237.25 378.25 44.03 1199.94 1800863 320689 17.81
NSE 1175.00 1269.00 1115.00 1245.25 386.25 44.97 1198.97 10960671 2551460 23.28
Total 12761534 2872149 22.51

The total traded volume on the two exchanges was 127.61 lakh shares which was 1.827 times the IPO size of 69.84 lakh shares. The delivery volume was 28.72 lakh shares which was 22.51% of the traded volume and 41.12% of the issue size. If one were to consider the delivery on the basis of non-anchor portion as their shares are locked-in, the same was 58.56%. The weighted average of the day’s trade was Rs 1199.94 on the BSE and Rs 1198.97 on the NSE, indicating that there was panic amongst the leveraged investors and they sold at a substantial loss. After their panic subsided, the share price moved up and stabilises another 45-50 Rs higher.

There was one institutional trade where Kotak India Midcap Fund bought 2,53,290 shares at Rs 1,149.15. Probably this helped bring some stability to the counter which was under pressure from leveraged HNI’s. On a rough estimate a leveraged investor who applied for the full issue of Rs 600 crs would have lost Rs 10.50 lakhs assuming he sold at the weighted average price of Rs 1199-1200. He would have paid interest on the leverage of Rs 63.28 lakhs upfront and a margin of Rs 3 to 6 crs. Take your call on who benefited and who lost.

Yet another case of the issue being highly successful, seeing huge subscription, but the very people who were responsible for that huge subscription losing out. The share is likely to be under pressure till the leveraged investor gets out latest by today or tomorrow.

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