All that glitters is not gold – Listing is a disaster
Shree Ganesh Jewellery House Limited listed its shares this morning on the BSE and NSE. The company had issued 1.43 cr shares which comprised of a fresh issue of 1.21 cr shares and an offer for sale of 21.33 lac shares in a price band of Rs 260-270. The issue was subscribed 1.96 times and the issue price was fixed at Rs 260, which is the lower end of the price band.
The share opened at Rs 258 on the BSE and Rs 250 on the NSE respectively. The opening rates itself were the highs. Thereafter it was a one way slide and there was virtually no recovery whatsoever. The share slid all the way to the low of Rs 160.55 on the BSE, a loss of Rs 99.45 or 38.25% from the issue price of Rs 260. On the NSE the low was Rs 161.75, a loss of Rs 98.25 or 37.79%.
| Exchange | Open | High | Low | Close | Net Change | % gain | Wt Avg | Volume | Delivery | Del % age |
| BSE | 258.85 | 258.85 | 160.65 | 163.25 | -96.75 | -37.21 | 174.80 | 27489468 | 3537391 | 12.87 |
| NSE | 250.00 | 250.00 | 161.75 | 164.55 | -95.45 | -36.71 | 174.43 | 30334125 | 4292418 | 14.15 |
| Total | 57823593 | 7829809 | 13.54 |
The scrip saw a total trading of 5.78 cr shares or roughly 4.07 times the IPO size. The delivery volume of 78.30 lakh shares was a mere 13.54% of the traded volume, but it was 55.14% of the IPO size. Two institutions have sold shares at a loss of about Rs 90 or 34% on day one. What is shocking is the fact that if they liked the issue in the first place and then subscribed, why sell at such a big loss on day one? What has changed that warrants such an action?
Standard Chartered Bank (Mauritius) Limited A/s Emerging India sold 5,31,484 shares at an average price of Rs 169.23 while Emerging India Focus Fund sold 8,08,615 shares at an average price of Rs 169.38.
The market capitalization of the company at the issue price was Rs 1577.74 crs. The company lost Rs 587 crs or 37.21% on day one. The fall is indeed appalling. The company looked decent and this writer had recommended the issue stating “Subscribe for appreciation in the medium term”. The performance on day one is indeed depressing. One hopes that the promoters of the company do announce their results for the quarters ended December 2009 and March 2010 and redeem themselves.
If the company does not redeem itself it would once again be proved that all that glitters is not gold. What is even scarier is that next week we would see the listing of yet another jewellery company Goenka Diamonds which would be yet another story.
