Sterling and Wilson Solar Limited which had tapped the capital markets with its offer for sale for Rs 3,125 crs debuted on the bourses yesterday and lost about 7% at close. The company had issued shares at the top end of the price band of Rs 775-780. It had earlier completed allocation to anchor investors where it allotted 1,80,28,846 equity shares to 21 anchor investors comprising of 27 entities.

The highest allocation was made to Nomura India Investment Fund Mother Fund who was allotted 28.84 lakh shares or 16% of the anchor book. This was followed by Reliance Capital Trustee Co Ltd who was allotted 25.64 lac shares or 14.22% in three funds. Indian funds were allotted 20.27% of the anchor book while Foreign funds were allotted 79.73% of the anchor book.

The issue was open from Tuesday the 6th of August till Thursday the 8th of August. The issue was subscribed by QIB’s and received decent support from HNI’s and Retail investors. However, the HNI and Retail portion remained undersubscribed. HNI portion was subscribed 0.89 times while Retail portion was subscribed 0.30 times. The issue was overall subscribed 92.25% including anchor allocation and garnered Rs 2883 crs.

The discovered price on BSE was Rs 700 while it was Rs 706 on NSE. The traded volume at the discovered price was 11,380 shares on BSE and 1,25,810 shares on NSE. The high of the day was Rs 755.50 on BSE and 753.45 on NSE while the low was Rs 691 and 690.10. Call it strange or bizarre coincidence, the low yesterday made by debutant Spandana was Rs 690 and Rs 691.10. Unbelievable but true a difference of just 10 paisa. Of course, the issue price was different. The closing price of SW Solar was Rs 725.35 on BSE, a loss of Rs 54.65 or 7.01% while it was Rs 726.20, a loss of Rs 53.80 or 6.90% on NSE.

The traded volume was 49.08 lac shares which was 13.28% of the IPO size or 25.92% of the non-anchor issue. Delivery volume was 21.10 lac shares which was 42.99% of the traded volume and 5.71% of the IPO size of 369.61 lac shares. It was 11.15% of the non-anchor portion. Weighted average of the days trade was Rs 724.65 on BSE and Rs 724.16 on NSE which is very close to the days close as well. This indicates that the share was never under any severe pressure throughout the day. Prices were stable and even though the share closed with losses of 7% it was steady.

There were no institutional trades on either the buy or sell side.

The conclusion of the day was that shares closed with losses of 7% on decent trading and reasonable deliveries. The size of the issue was large and this needs to be borne in mind when looking at the overall trading and delivery percentage.

Spandana Sphoorty Financial Limited which had tapped the capital markets with its simultaneous offer of a fresh issue of Rs 400 crs and offer for sale of 93,56,725 equity shares debuted yesterday on the bourses and had a very volatile day. The issue which had a price band of Rs 853-856 and shares were allotted at Rs 856 saw a low of Rs 690 and a high of Rs 865 on the BSE before closing at Rs 848.40.

The company had earlier allotted 42,08,886 equity shares to 15 anchor investors comprising of 18 entities. The highest allocation was made to four investors of 4,43,938 equity shares representing 10.5% of the anchor allocation to Wells Fargo, Bajaj Allianz Life Insurance, Goldman Sachs and ICICI Prudential Insurance. The issue had opened on Monday the 5th of August and closed on Wednesday the 7th of August.

The issue was just about subscribed. The QIB portion was subscribed 3.11 times while the remaining two segments remained undersubscribed. HNI portion was subscribed 0.55 times while retail was subscribed just 0.09 times. One would have expected that with HNI and Retail hardly there and having a total allotment of just about 16.43 lac shares from an issue size of 140.29 lac shares, share would have less movement was grossly wrong. Volatility was at an extreme.

The discovered price on the BSE was Rs 824 while it was Rs 825 on NSE. The traded volume during price discovery was quite low with 2,854 shares traded on BSE and 1,45,884 on NSE. After price discovery the share tried to reach the issue price but failed to do so. The share price at 10.21 am was Rs 834-836 on both the exchanges and in a span of 10 minutes it fell to Rs 690 on BSE and Rs 691.10 on NSE. This is an amazing fall and defies logic. With HNI and Retail investors hardly there who did this price fall when markets were positive and the SENSEX was up about 300-350 points? I am sure the regulator should sense something and feel it is worth his while to look into the issue and explore the same.

Anyway, the stock then rallied over the next three hours or so and hit a new high of Rs 865 on BSE and Rs 866 on NSE. The closing price was Rs 848.40 on BSE, a loss of Rs 7.60 or 0.89% while it was Rs 847.80 on NSE, a loss of Rs 8.20 or 0.96%. The weighted average of the days trade was Rs 806.86 on BSE and Rs 804.79 on NSE. The traded volume on the two exchanges combined was 51.04 lac shares which was 36.38% of the IPO size of 140.29 lac shares. If one were to consider the non-anchor portion the traded volume was 51.97%. Delivery volume was 8.85 lac shares which was 17.34% of the traded volume. It was 6.31% of the IPO size and 9.01 % of the non-anchor portion. In either case traded volume and delivery volume were quite low but volatility was significantly higher.

There was little or hardly any interest from HNI’s in this issue. They have probably found a new way to make their killing by increased volatility. While fundamentals of the company, its business have all taken a back seat the volatility on debut day has ensured that this share would be remembered as the one which burned investors, many intra-day traders and left analysts confused about whodunit?

In conclusion for the record book, shares issued at Rs 856 after a volatile day ended at Rs 848.40.