Mazagon Dock Shipbuilders Limited which had tapped the capital markets with its offer for sale of 3,05,99,017 equity shares made its debut at the bourses yesterday. The company had issued shares at Rs 145. Its price band was Rs 135-145. The issue was open between Tuesday the 28th of September and Thursday the 1st of October. This being an issue from the government of India there was no anchor allocation.

Shares debuted at Rs 216.25 on BSE and Rs 214.90 on NSE. The high of the day was Rs 216.65 on BSE and Rs 216.95 on NSE. The low of the day and the close was the same at Rs 173.00 on BSE and Rs 171.95 on NSE which were the lower circuits of the day.

The issue had received excellent response and was subscribed 157.41 times overall. The QIB portion was subscribed 89.71 times, HNI portion 678.88 times, Retail portion 35.63 times and Employee portion 3.88 times. There were over 28 lac applications. The cost of funding for the leveraged HNI was between Rs 141-151 depending on whether he paid 7.5% or 8% interest.

The share was under pressure from the start and never seemed to be comfortable at any point of time. This pressure was from the HNI’s whose bucket was for 45 lac shares. They created complete chaos and tried to recover some of their losses by shorting the market and then trying to buy back cheaper.

The traded volume on the two exchanges was 435.25 lac shares which was 1.42 times the IPO size of 305.99 lac shares. Delivery volume was 198.55 lac shares which was 45.62% of the traded volume and 64.89% of the IPO size. Weighted average of the day’s trade was Rs 187.88 on BSE and Rs 186.64 on NSE. The closing price was Rs 173 on BSE, a gain of Rs 28 or 19.31%. The closing price on NSE was Rs 171.95, a gain of Rs 26.95 or 18.59%.

Considering the cost of funding and the colossal support or interest the share had garnered it could be termed a poor listing day show. On a different thought, it could be time that the regulator looks at the funding mechanism employed by HNI’s and re-evaluates the entire system.