Shares of VRL Logistics Limited (VRL) listed on the bourses on Friday 30th April and saw huge gains for investors who were lucky to get allotment of shares. The company had launched its offer for shares which consisted of Rs 117 crs and an offer for sale of 171.16 lac shares in a price band of Rs 195-205. The issue received excellent response and was oversubscribed 74.26 times with HNI’s portion being subscribed 250 times courtesy margin funding. This margin funding is disrupting the demand in IPO’s and causing a mismatch in genuine demand and subscription.

The issue was priced at the upper band of Rs 205 and listed at the discovered price of Rs 288. The high was Rs 309 and the low Rs 281 on the BSE and Rs 286 on the NSE. Even at the lowest price investors made a healthy Rs 76 or 37% returns. The volumes on the exchange were huge with almost 3 crore shares traded on day one. Delivery volume was about a third at 97.33 lac shares or 32.47% of shares traded. What is indeed heartening is the fact that the weighted average was Rs 297.42 on the BSE and Rs 296.86 on the NSE.

The total delivery was matched with some institutional purchases where against a delivery of 97.33 lac shares, a combined 59.43 lac shares were bought by three institutions. Goldman Sachs bought 27.43 lacs, followed by an identical 15 lacs each from Ashoka PTE and HDFC Mutual Fund. Thus the high delivery percentage of 32.47% or roughly 1/3rd of trading volume has been taken care of. With the floating stock reduced, there could be further price upside or atleast the prices would remain steady and not crash.

The listing was a great success and even though the demand from HNI’s was completely out of sync with reality on account of leveraged funding, it still would go down as a success where all successful applicants made good money. The cost of funding of Rs 75 for the leveraged HNI helped in price discovery.