Shares of CL Educate Limited listed on Friday the 31st of March at the NSE where there was a listing ceremony. The ringing of the gong for the debut of shares to begin trading did not quite turn out to be what was expected. The price discovered was at Rs 398 and Rs 402 against the issue price of Rs 502. The discovered price was roughly 20% lower. The shares are traded on both the exchanges, BSE and NSE.
The company had earlier launched its simultaneous offer with the fresh issue component of 21.80 lakh shares and an offer for sale of 25.80 lakh shares. The price band was Rs 500-502. The company had allotted 14.28 lakh shares to nine anchor investors comprising of 17 entities. Four anchor investors each have been allotted 1,99,230 shares or 13.95% of the anchor portion.
The issue was subscribed but it may be said that the response was not very encouraging. The QIB portion was subscribed 3.65 times, HNI undersubscribed at a mere 0.21 times and retail at 1.63 times. There were a total of 73,000 applications which means that the issue on number of lots was subscribed 1.33 times. Considering that the retail size in recent issues has seen very encouraging response, this issue was not in the investor’s radar. The valuation, sector problems and recent issues in this sector doing badly were some of the reasons for the lacklustre performance. To top it all the company investing in building schools and a university added to their woes. While the company has done a deal to exit the schools and university, quite a bit of damage has already been done.
Coming back to the listing day, the issue traded at the upper band of the discovered price thereafter on very thin volumes. The total volume traded of the share which is in trade to trade mode for ten days was a mere 1.74 lac shares against the IPO size of 47.6 lakh shares, which means just 3.67%. This volume is probably one of the lowest in quite some time and shows the lack of interest even after the share was trading 16-17% lower.
| Exchange | Open | High | Low | Close | Net Change | % Gain/ Loss | Wt.Avg | Volume | Delivery | Del %age |
| BSE | 398.00 | 417.90 | 398.00 | 417.90 | -84.10 | -16.75 | 412.88 | 36559 | 36559 | 100.00 |
| NSE | 402.00 | 422.10 | 402.00 | 422.10 | -79.90 | -15.92 | 417.93 | 138262 | 138262 | 100.00 |
| Total | 174821 | 174821 | 100.00 |
From the table above one can see that the weighted average of the day was at Rs412.88 on the BSE and Rs 417.93 on the NSE. Post price discovery volume happened at the 5% upper circuit and the lower weighted average is on account of trade at the price discovery. Delivery was 100% as the share is traded in the trade to trade category.
All in all a very disappointing show. One needs to see whether support comes in at the lower levels in the coming days. Volume will be a key concern for the share.
