Chemcon Specialty Chemicals shares debuted for trading on the bourses on the 1st of October and the discovered price on BSE was Rs 730.95 while it was Rs 731 on NSE. The company had issued shares at Rs 340, which meant that the discovered price was higher by Rs 390.95 or 114.98% on BSE. On the NSE the gain was marginally higher at Rs 391 and 115%. The high of the day was Rs 743.80 on BSE and Rs 731.25 on NSE. Thereafter the scrip was in a downward move and lost ground throughout the day to close at the lower circuit of Rs 584.80 on both the exchanges.

Earlier the company which had tapped the capital markets with its fresh issue for 165 crs and an offer for sale of 45 lac shares completed allocation to anchor investors. The company allotted 28,05,880 equity shares to 13 Anchor investors comprising of 16 entities. The highest allocation was made to ICICI Prudential and IDFC emerging Business Fund and Dynamic Equity Fund who were allotted 3,08,836 shares or 11.01% of the anchor allocation.

The issue had opened on Monday the 21st of September and closed on Wednesday the 23rd of September. The price band was Rs 338 to Rs 340. The issue was subscribed 149.33 times with QIB portion subscribed 113.54 times, HNI portion 449.14 times and Retail portion was subscribed 41.21 times. There were 28.05 lac applications which meant that on the basis of forms the issue was subscribed in retail by 37.59 times.

The price discovery saw 73,018 shares being traded on BSE and 15,03,339 shares traded on NSE. The share saw a total trading of 177.24 lac shares on both the exchanges combined. The traded volume was 1.89 times the IPO size and 2.70 times the non-anchor issue size of 65.59 lac shares. Delivery volume was 58.08 lac shares which was 32.77% of traded volume and 62.02% of the IPO size of 93.65 lac shares. Considering non-anchor size, delivery percentage was 88.55% and this could easily have been higher but for the lower circuit on both exchanges. The HNI portion was subscribed a massive 449.14 times which meant the cost of funding was between Rs 215-220. So far so good, with all people having sold making money. If the share slips another Rs 25, the breakeven would have gone and profits would turn into losses. Looking at it in another way the cost of funding corresponds to 64% of the issue price.

The weighted average of the day’s trade was Rs 627.90 on BSE while it was Rs 632.29 on NSE. Clearly the share was under tremendous pressure as the lower circuit indicates and the price difference of almost Rs 44 on BSE and Rs 49 on NSE from the weighted average.

There were no names of buyers on either of the two exchanges on day one. This suggests that no big buyers were there on day one.

The week ahead would determine the future of the share in the short and medium term. A well-received IPO could turn into a not so good one on account of funding issue. Unfortunate!

Shares of Computer Age Management Services Limited (CAMS) listed on BSE Limited on Thursday the 1st of October. The discovered price was Rs 1,518 and 19,38,274 shares were traded at this price. The high of the day was Rs 1,550 and the low was Rs 1,306.20. The close was Rs 1,401.60, a gain of Rs 171.60 or 13.95%.

Earlier CAMS which had tapped the capital markets with an offer for sale of 1,82,46,600 completed allotment to anchor investors. The company allotted 54,19,230 equity shares to 35 anchor investors comprising of 52 entities. The top allocation was made to Smallcap World Fund who was allotted 4,87,800 equity shares or 9% of the anchor book. The next highest allocation was of 2,43,900 shares or 4.5% of the anchor book equally to 12 investors. This effectively meant that 13 investors were allotted 63% of the anchor book.

The issue had opened on Monday the 21st of September and closed on Wednesday the 23rd of September. The price band was Rs 1,228 to Rs 1,230. The issue was oversubscribed 46.99 times overall with QIB portion subscribed 73.18 times, HNI portion 111.85 times and Retail portion subscribed 5.55 times. The employee portion was subscribed 1.16 times. The cost of funding for the leveraged HNI was between Rs 185-198, which means that he is losing money at the present price.

The traded volume was 131.80 lac shares which was 0.72 times the IPO size of 182.46 lac shares and 1.03 times the non-anchor size. Delivery was 70.90 lac shares which was 53.80% of the traded volume and 38.88% of IPO size. It was 55.28% of the non-anchor portion which means there is another 57 lac shares to be delivered. This could cause pressure on the share price in the short term. The weighted average of the day’s trade was Rs 1,463.65 which was way above the closing price of Rs 1,401.60.

There was buying of 32.48 lac shares by institutional investors such as Canara Robeco, Nomura India, Goldman Sachs, Smallcap World Fund (an anchor investor as well) and Fidelity. With marquee investors picking up almost 43% of the delivery at an average price of Rs 1,482.31, a lot of the selling pressure was absorbed. Those who have not sold as yet could be under Monday onwards.

This IPO was well received and had a decent premium attributed to it as well. When money making becomes too easy, the law of averages catches up and sure shot calculation go awry. This is life and also applies in the markets.

Good issue but listing gains at end of day are capped at 13.95%.

The offer for sale of 3,05,99,017 equity shares in a price band of Rs 135-145 received overwhelming support and was oversubscribed a massive 157.41 times. The issue had opened on Tuesday the 28th of September and closed on Thursday the 1st of October. This was the third issue from the government of India stable engaged in shipbuilding after Cochin Shipyard and Garden Reach Shipbuilders Limited.

The issue was subscribed 89.71 times in the QIB portion, 678.88 times in the HNI category and 35.63 times in Retail category. Even the employee category was oversubscribed 3.88 times. There were 26.31 lac applications and on the basis of number of lots, the issue was subscribed 25.60 times.

HNI category saw funds being garnered to the tune of Rs 44,600 crs, while the overall issue garnered funds to the extent of Rs 69,838 crs. The cost of funding for the leveraged HNI would be between Rs 132-142.

In August 2017, Cochin Shipyard Limited had tapped the markets with its offer for sale of Rs 1,486 crs and received subscription for 1.11 lakh crs. The issue was oversubscribed 76.19 times and there were 20.75 lac applications at that time, making it the largest subscription.

In October 2018, the issue from Garden Reach Shipbuilders and Engineers Limited struggled to get its issue of 344.67 crs subscribed and just about managed it after extending the same by three days.

The issue from MDL has caught the fancy of the market but with funding cost overtaking rational listing price, will leveraged HNI make money? Seems Doubtful.

Full details of subscription are given below.