Bedmutha Industries which had tapped the capital markets with its IPO for 90 lakh shares in a price band of Rs 95-102 listed at the BSE and NSE on Thursday the 14th of October. The company had its listing ceremony at the BSE and the listing price was Rs 114.40. On the NSE the share listed at Rs 113.50. The high was a staggering Rs 205 on the BSE and Rs 204 on the NSE. The lows were Rs 98 on both the BSE and the NSE respectively. The share remained steady till 1pm and thereafter it went into an upward climb and moved up steadily. The last half hour was a virtual take-off and the share just shot through the roof and caught short sellers off guard. The stock rocketed to Rs 205 a gain of just about 100%. No fundamentals justify this price and I believe there is nothing which can explain why this price should merit attention. As to why this price happened in the first place, it was short sellers who did it when they were forced to cover their positions.
| Exchange |
Open |
High |
Low |
Close |
Net Change |
% gain |
Wt Avg |
Volume |
Delivery |
Del % age |
| BSE |
114.40 |
205.00 |
98.00 |
180.80 |
78.80 |
77.25 |
126.85 |
69800631 |
3344733 |
4.79 |
| NSE |
113.50 |
204.00 |
98.00 |
179.15 |
77.15 |
75.64 |
125.51 |
99371320 |
1482836 |
1.49 |
| Total |
|
|
|
|
|
|
|
169171951 |
4827569 |
2.85 |
The trading volumes at 1691.72 lakhs were simply astounding. The issue was for 90 lakh shares and a volume which is 18.8 times the IPO size defies logic and rationale. The delivery volume was 48.27 lakhs which was a mere 2.85% of the traded volume but a substantial 53.63% of the IPO size. The weighted average was Rs 126.85 which confirms the runaway rise on account of short covering in the last half hour.
The IPO was oversubscribed 7.69 times and the HNI portion was subscribed 29.19 times. Retail portion was subscribed 8.51 times and the QIB portion remained unsubscribed and was at a mere 0,67 times. Institutional activity saw selling on the BSE and NSE. Taib Securities, Somerset Emerging Opportunity Fund, India Max Investment Fund and Taib Bank sold 13.61 lakh shares on day one.
The performance is phenomenal but appears to be ‘managed’. Such stocks are dangerous to the health of investors. I would discuss more on this over the weekend. Let me suffice to say that Bedmutha Industries had a spectacular performance on its debut at the bourses yesterday.
