Shares of Quick Heal Technologies Limited (Quickheal) listed on the BSE and NSE. The company had launched its issue which consisted of a fresh issue for Rs 250 crs and an offer for sale of 62.69 lac shares in a price band of Rs 311-321. The company had allotted 41,70,586 equity shares to 10 anchor investors comprising of 13 entities at the top end of the price band. The issue was subscribed 10.80 times and had received support in all categories or buckets including the non-retail or HNI portion which was subscribed 36.69 times.

The share made its debut at a discount to the issue price and opened at Rs 304.95 on the BSE and Rs 305 on the NSE against the allotment price of Rs 321. The high was Rs 329.95 and Rs 330 respectively. The share was under pressure throughout the day and intensified during the last half hour of trading. There was a complaint filed by one investor against the company who claims to be a shareholder, but his name does not appear in the company’s RHP. This gentleman claims that some 20,000 shares were allotted in his and his family members name when the companies paid up capital was 50,000 shares. This means that on an expanded capital base of 70,000 shares the complainant held 28.57% of the company. This gentleman who happened to be on the board for a brief time resigned subsequently stating his inability to continue. Seems difficult to digest that owning such a large stake, one would resign.

The timing of the complaint seems to be matched with the listing of the company to cause damage to its image. The complainant chose not to raise the issue to SEBI or the lead managers of the company at any point after the draft prospectus was filed. Nor did he do anything when the issue was open. He chose one day before listing. One is not sure whether the complaint would even be admitted by SEBI. There is an interesting side line to the whole episode where the company has filed cases for cheque bouncing against the complainant and they are pending for a long time. One fact is clear that currently the company has lost image and has suffered. The complainant has got his share of limelight and coverage on an electronic news channel.

The share saw huge traded volume of 276.11 lac shares which is 1.96 times the issue size. The delivery volume was 42.66 lac shares which is 15.45% of the traded volume and 30.35% of the issue size. If one reduces from the issue size the anchor portion, the delivery percentage jumps to 43.15%. This indicates that QIB’s have also sold shares on day one as HNI’s who were leveraged would be pushed into selling. Secondly retail investors in general do not sell at a loss on day one but tend to hold on for some time.

The weighted average for the day was Rs 291.48 and Rs 291.44 which itself was a loss of Rs 29.52 or 9.19%. The closing price for the day was Rs 254.45 and Rs 253.85. The loss on day one was Rs 66.55 and Rs 67.15, signifying a loss of 20.73% and 20.92% on day one.

This allegation/complaint by the investor needs to be expedited as the credibility of the company has virtually been challenged. If no such thing is found I am not sure whether the complaint can be charged with causing loss to shareholders wealth amongst other things. Bad day for investors whichever way you look at it.