IPO Watch: Global Surfaces, Divgi TorqTransfer — some top IPOs and their performance after listing

The initial share sale of companies with a robust management and financial track record finds huge number of buyers in the primary market, which results in higher subscription. Initial Public offering (IPOs) are the main route for a company to get listed and enjoy the opportunities offered on the Indian stock exchanges.

The higher demand of shares in an IPO is adequate for the companies counting on for listing day gains and for long-term bets as well.

"Out of Divgi Torqtransfer Systems and Avalon Technologies Limited IPOs, which were for partially or fully offer for sale (OFS), only Global Surfaces has given tremendous return to the investors. Whereas Divgi Torqtransfer Systems has given only 10 % return and Avalon Technologies has not performed as per investor’s expectations," said Rajesh Sinha, Senior Research Analyst at Bonanza Portfolio.

"We believe that OFS or fresh issue does not have any direct impact on the performance of the IPOs. OFS just is a route for existing investors / promoters to sell their holdings from the company, which doesn’t mean that the future outlook of the company is not good," Sinha said.

The OFS or offer for sale mechanism is a simpler method of share sale through the exchange platform for listed companies. Unlike a follow-on public offering (FPO), where companies can raise funds by issuing fresh shares or promoters can sell their existing stakes, or both, the OFS mechanism is used only when existing shares are put on the block. Only promoters or shareholders holding over 10 percent of the share capital in a firm can come up with such an issue.

Below are some top IPOs and their performance after listing:

1) Global Surfaces Limited

: Shares of Global Surfaces Ltd made their positive market debut on stock exchanges with the stock listing at Rs 164 apiece on the NSE, a premium of more than 17 percent as compared to its IPO issue price of Rs 140 per share.

The initial share sale comprised of fresh issuance of 85.20 lakh equity shares and an OFS of up to 25.5 lakh equity shares by promoters — Mayank Shah and Sweta Shah.

The current share price of the stock is Rs 214.20 on NSE, up 36.73 percent in the last one month.

Global Surfaces Ltd's IPO was subscribed 12.21 times by the final day of the offer on March 15, 2023. The offer received bids for 9.46 crore equity shares against 77.49 lakh shares on offer.

2) Sah Polymers Limited: The IPO of polymer manufacturer Sah Polymers was subscribed over 17 times on the last day of subscription. The initial share-sale received bids for 9,79,44,810 shares against 56,10,000 shares on offer. The offer had opened for public subscription on December 30, 2022 and concluded on January 4, 2023.

Sah Polymers IPO consisted of a fresh issue of 1,02,00,000 equity shares, with no OFS component.

It debuted on January 12, 2023 on the stock exchanges. The stock is currently priced at Rs 72.72 on the BSE and Rs 72.30 on the NSE, up nearly 11.88 per cent since listing.

3) Divgi TorqTransfer Systems Limited: The share of Divgi TorqTransfer Systems made a decent debut on the bourses. At present, the stock is commanding Rs 647.85 per share on BSE and 647.05 apiece on the NSE.

The company's initial public offering or IPO opened on March 1 and concluded on March 3 with a subscription of 5.44 times.

Divgi TorqTransfer Systems IPO comprised of fresh issue aggregating up to Rs 180 crore and an OFS of up to 39,34,243 shares.

4) Radiant Cash Management Services Limited: Shares of Radiant Cash Management Services had a good debut on Dalal Street. The stock opened at Rs 103, up 9.57 percent from its issue price of Rs 94 per share on the NSE. It opened at Rs 99.30 on the BSE, up 5.6 percent.

The IPO consists of fresh issue of Rs 60 crore and an offer for sale of Rs 327.9 crore by the founders and other investors.

The issue was subscribed 53 percent during December 23-27, but the IPO sailed through after the company significantly reduced its offer-for-sale component.

5) Avalon Technologies Limited: Shares of Avalon Technologies made its flat market debut with the stock listing at Rs 436 per piece on the NSE, as compared to its issue price of Rs 415-436 per share. On the BSE, Avalon Technologies shares started trading at Rs 431 apiece.

The IPO had a fresh issue aggregating up to Rs 320 crore and an OFS of up to Rs 545 crore by promoters and existing shareholders.

"Avalon Technologies Ltd made its debut in the market at a listing price of 436. The company's issue price was ₹415-436, so shares are listed at par with no profit and no loss. Investors with a high-risk tolerance may consider holding Avalon Technologies Ltd. shares long-term, with a recommended stop loss of around 405, which is lower price band of the issue," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.