GMP Evaporates on Listing Day; Windlas Biotech Makes Disappointing Debut

Four new listings on the first day of the trading week on Monday seem to indicate that the euphoria in the IPO market on a listing day is subsiding. Out of four IPOs debuting the bourses on Monday, only one Devyani International listed at a respectable premium, other two IPOs namely; Krsnaa Diagnostics and  Exxaro Tiles are listed at a marginal premium of 7.5 per cent and 5 per cent respectively. Whereas shares of Windlas Biotech Ltd (WBL) disappointed its investors. It not only listed at a discount of 5 per cent to its issue price but also closed with a loss of 11.59 per cent to its issue price.

In stark contrast to investors reaping bumper windfall gains on a listing day in counters like GR Infra-projects, Tatva Chintan Pharma Chem, Zomato and Clean Science. “Monday’s listing is an eye opener”, said, analysts. However, an indication of this effect was given by the stocks of Glenmark Life Sciences and Rolex Rings, which gave modest listing gains earlier this month, they added.

According to analysts, the drop in listing gains is reflecting the rates of grey market premium (GMP) prevailing ahead of the listing in these stocks. Ahead of listing Devyani International and Krsnaa Diagnostics were fetching premiums of Rs 64 and Rs 450 respectively. However, just before the listing, the GMP came down drastically to Rs 40 and Rs 270 per share in these two stocks. “The debut was worse compared to the dropped GMP just ahead of the listing,'' they added. 

All these IPOs posted below the expectations despite receiving good response from the investors. Devyani International IPO was subscribed 117 times, Krsnaa Diagnostics 67 times while WBL and Exxaro Tiles, subscribed 23 times each.

Against the issue price of Rs 90 per share, Devyani International’s stock listed 57 per cent higher at Rs 141 per share. However, it closed the day lower at Rs 123.35, giving its investors a return of 37 per cent on the debut day.  

Devyani International is the largest franchisee of Yum Brands in India and collaborates with Yum across various aspects of its operations for KFC and Pizza Hut. It also has a franchisee for the Costa Coffee brand and stores in India.

Pune-based Krsnaa Diagnostics (KDL) made a decent debut on the bourses with the shares of the company getting listed at Rs 1,025, a 7.4 per cent premium against issue price of Rs 954 per share on the BSE. On the National Stock Exchange (NSE), the stock of the healthcare services company opened at Rs 1,006, a 5.5 per cent higher against its issue price. However, the stock closed with marginal gains of 3.85 per cent at Rs 990.75 on BSE while on NSE it closed 3.46 per cent higher at Rs 387.

In a disappointing debut, shares of WBL were listed at Rs 437, 5 per cent below its issue price of Rs 460 on the NSE, while it made its debut on BSE at Rs 439. 

Exxaro Tiles has made a quiet debut on the bourses with the shares of the company listing at Rs 126, a 5 per cent premium against issue price of Rs 120 per share. At the close, the stock of the construction materials company gained 10 per cent to end the day at Rs 132.30 on both the exchanges.