Share closes at Rs 403 or virtually flat
Thejo Engineering Limited which is the first company to be listed on the SME platform at NSE made its debut on the bourse on Tuesday the 18th of September. The issue listing has many different things and makes it’s a unique listing. The listing ceremony was held at a five star hotel in New Delhi where the honourable Finance Minister was the Chief Guest and SEBI Chief was the guest of honour.
This indeed makes this SME offering the most hyped listing in recent times and probably the only one of its kind in living memory. Secondly an exchange listing shares of a company at a ceremony outside the exchange is quite unheard of but considering it was the launch of a new platform on NSE it may be overlooked. Secondly competition has increased and in the times when we have another brand new exchange breathing down its neck it may be considered as an attempt to demonstrate its clout.
There is a firm allotment to the market maker of Rs 50 lacs worth of shares which would reduce the net offering to the public to roughly Rs 18.5 crs.
Coming to the issue of Thejo itself, the company had launched its IPO for 19.01 crs in a price band of Rs 402-430 and was open for subscription between the 4th and 6th of September. The issue was overall subscribed 1.53 times with the retail portion receiving the maximum response being oversubscribed 2.61 times. The issue was expensive and did not leave anything on the table for investors.
The share listed on the NSE and had its call auction price discovery mechanism which saw the price discovered at Rs 403 against the issue price of Rs 402. A total of 2,100 shares or 7 lots were traded on the listing day which was NSE’s ‘EMERGE’ (SME Platform) debut. The quantity traded leaves a lot to be desired but things could get worse going forward on this platform because of the rules. NSE has two different options for trading on the exchange platform for SME. The first option known as normal (continuous) market is similar to what we for all shares traded on NSE or BSE. The second option which is permitted on ‘EMERGE’ is known as call auction market. Under this system there would be call auction every day and trading would end immediately after the call auction price discovery is done. This means that there would be no continuous trading on the exchange whatsoever. Investors on this exchange would have to try their luck everyday between 11 am and 11.55 am and then pray to “GanpathiBappa” to hope that their order converts to a trade.
NSE does give an option to the issuer to change the system of trade from one to the other option after a 30 day notice. If Thejo wants to usher a feeling of goodwill for its family of investors it should signify this change to the exchange immediately.
All in all a high profile listing for NSE’s first SME listing but clearly the trading rules and the poor price performance left a bad taste in the mouth and a lot to be desired.
