Onelife Capital Advisors Limited which had tapped the capital markets with its IPO for 33.5 lac shares in a price band of Rs 100-110 listed today. The share opened at Rs 115 on the BSE and Rs 110 on the NSE. The high of the day was Rs 173 on the BSE and Rs 174.80 on the NSE. The low was Rs 114 on the BSE while it was the opening level of Rs 110 on the NSE. The close was Rs 145.90 on the BSE and Rs 145.95 on the NSE. The share gained Rs 35.90 or 32.64% on the BSE and Rs 35.95 or 32.68% on the NSE.

The IPO was subscribed 1.53 times and was open between the 28th of September and the 4th of October. The company is a merchant banker and plans to become a full-fledged broking outfit going forward. The present market conditions and the scenario in the broking industry are well known and everybody is aware of the poor market conditions and the slowdown in the sector. The IPO grade of the issue was 1/5 which is the lowest possible grade possible. The company has made losses in the year ended March 2011, the latest period for which results are available. It is indeed quite surprising that this company with a market cap of Rs 133.60 crs at the price of Rs 110 could be so well received. The market cap has further risen today to reach a level of Rs 177 crs on revenues of under 40 lacs in the previous year and a net loss in excess of 60 lacs. I believe one should stop using logic in this market when issues are subscribed by “friendly intermediaries”.

Coming to the stock price movement, the share price was an uptrend after opening around Rs 130 and rose to Rs 150-152. Having reached this level in the first two hours of trade, the share dived to make the low of the day in the next ten minutesand touched a level of Rs 114. The volumes had increased on this downfall, but then the stock again began gaining in strength and over the next two hours made the high of the day at Rs 173. The weighted average of the day’s trade was 145.24 on the BSE and Rs 146.99 on the NSE, indicating that the average and closing prices were more or less similar. Investors who had applied for the shares of the company had an opportunity to exit the company with gains. One hopes that the same has been done because the credentials of the company are not that compelling. Thereafter over the remaining part of the day the stock was under pressure and gave up a large part of its gains and closed at Rs 145.90 on the BSE and at Rs 145.95 on the NSE.

Trading volumes were huge on the two exchanges combined and clocked a total of 584.98 lac shares. This compared to the IPO size of 33.5 lac shares was 17.46 times. This is a huge turnover by all standards. The delivery volume was 17.17 lacs which was a mere 2.94% of the traded volume and 51.25% of the IPO size. The QIB names do not appear in the bulk trades details on the two exchanges. If one were to remove the allotment made to these institutional players it then appears that all other investors have exited the company. The two FII’s were Cresta Fund and Afrasia Bank Limited who between them own 16,30,992 shares.

The issue has ended the day with substantial gains for its investors. What the tomorrow or future trading days is difficult to say as of today, but the fundamentals of the issue, the business it is in makes it a risky investment.