PG Electroplast Limited listed on the BSE and NSE yesterday. The company had issued 57.45 lac shares in a price band of Rs 190-210. The issue was subscribed an overall 1.34 times. The share listed at the BSE at Rs 200 and on the NSE at Rs 215. The high of the day was Rs 490 on the BSE and Rs 484.40 on the NSE. The low was Rs 175.05 on the BSE and Rs 176 on the NSE. The close of the day was a spectacular Rs 411.65 on the BSE and Rs 415.30 on the NSE.

The stock opened steady and moved in a band alternating between a small gain of Rs 10-15 to the issue price and a loss of Rs 25-20 to the issue price. This continued till about 12 noon, and then the share took off. It rose sharply on huge volumes to past the 300 level and then fell equally sharply to Rs 225. The rise and the fall took roughly 75 minutes and the entire duration of this rally and fall was accompanied with huge volumes. The last 75 minutes of trade saw the stock rise one way from the level to make the high of Rs 490 on the BSE and Rs 484.40 on the NSE. The weighted average of the day saw the closing price come down sharply and the close was Rs 411.65 on the BSE, a gain of Rs 201.65 or 96.02%, while the close on NSE was Rs 415.30 or Rs 205.30, a gain of 97.76%.

PRICE CHART TO BE APPENDED The traded volume on the two exchanges was a significant 692.61 lac shares which was 12.06 times the IPO size of 57.45 lac shares. The delivery volume was 31.14 lac lac shares which was a mere 4.5% of the traded volume but a significant 54.21% of the IPO size. The weighted average of the day was Rs 260.23 on the BSE and Rs 259.32 on the NSE. The huge difference in the weighted average and the closing price is because of the huge spurt in the last seventy five minutes of trade when the share rose over Rs 200. The trading pattern suggests that people were caught short and that led to the huge rally or spurt in the share in the last 75 minutes. The point that is not clear is the lower delivery percentage, because normally with such sharp movements and investor making money it would be prudent to assume that the delivery percentage of IPO size would be around 80%. This means that people are holding on and are yet to sell.

The pattern also indicates that there was an effort made to trap day traders and the movements also suggest that the sharp up and down moves achieved the purpose and day traders were trapped. This kind of activity is now rampant in the market place and it is fair to assume that such activities are actually permitted or are done with SEBI totally ignoring the on-going activity on listing day. Similar is the case with many of the new IPO’s particularly the recent ones and the issues currently on, where they have very poor fundamentals and are subscribed to by “friendly” intermediaries and then the price is “rigged” on listing day and subsequently investors are trapped when the share starts falling.

Coming back to PG, it was a great performance for the company and gains of just under 100% are significant. The fact that investors have made money is a positive sign and speaks well for the company. One hopes that these gains remain for some time.