Shares of Sharda Cropchem listed on the bourses and were off to a flying start. The company had tapped the capital markets with its offer for sale of 2.25 cr shares in the price band of Rs 145-156 between the 5th and 9th of September. The issue received excellent response and was subscribed 60 times. The issue was priced at Rs 156 and raised Rs 351.86 crs at the top end of the price band at which shares were allotted.
The oversubscription in the QIB category was a massive 251 times. The cost of application with borrowed finance considering 8% interest for 9 days meant that the interest cost would amount to Rs 77.24. This effectively meant that the allotment price for HNI’s with borrowed money was Rs 233.24.
| Exchange | Open | High | Low | Close | Net Change | % Gain/loss | Wt. Avg | Volume | Delivery | Del %age |
| BSE | 254.10 | 273.85 | 225.00 | 231.45 | 75.45 | 48.36 | 244.02 | 9564440 | 2372377 | 24.80 |
| NSE | 260.00 | 274.00 | 225.00 | 230.95 | 74.95 | 48.04 | 244.44 | 25978566 | 7956667 | 30.62 |
| Total | 35543006 | 10329044 | 29.06 |
From the table above one can see that the discovered price at 10 am when trading went live was Rs 254.10 on the BSE and Rs 260 on the NSE. The share made it’s high soon after and then began to fall on profit taking from the leveraged HNI and partially from the retail investor who was making over Rs 100 or about 64%. When the market price fell under Rs 240 there was some panic selling as HNI’s exited either at cost or marginal losses.
The traded volume was a healthy 355.43 lac shares which was 1.57 times the issue size while delivery volume was 103 lacs which was 29.06% of the traded value and a decent 45.79% of the issue size. The weighted average of the day’s trading is Rs 244.02 on the BSE and Rs 244.44 on the NSE indicating that the bulk of those who have sold even amongst the leverage HNI have made money. What is worth noting is that there are no names in either the delivery selling or delivery buying which makes one believe that the majority selling has come from the non-institutional category comprising of HNI’s and retail. This augurs well for the share in the medium term and long term as the buying which has happened could be from serious players.
This is the second consecutive listing of IPO where after Snowman, investors are making decent money. The price of Snowman is just about double while that of Sharda is about 50% up after day one. This would put tremendous pressure on the third IPO of Shemaroo Entertainment which would ne listing a little later. The issue from Shemaroo compared to the earlier two has poorer fundamentals and has issues about working capital and a tough and challenging environment.
All in all it can be said that the management of Sharda or its promoters who sold their shares along with the PE investor for once have not been greedy in pricing the issue and have left substantial money on the table for the investors as can be seen from the price at which the share listed and closed for trading at the end of day one.
