In spite of miserable post-listing performance for most initial public offers (IPOs) this year, Thinksoft Global, which got listed on Monday, has surged 120 per cent from its listing price on the Bombay Stock Exchange (BSE).
Analysts say the stock has been continuously rising since the listing day on the back of extreme speculation. Frenzied trading in the scrip led to 7,391,343 shares changing hands on BSE on Thursday. The highest volume was witnessed on Monday, with 17,924,873 shares being traded on BSE. The scrip is trading at Rs 220.50 compared to its issue price of Rs 125 and the listing price of Rs 100.
“There has been overspeculation in the stock. Otherwise, there is no reason behind such high volumes in a falling market. It is a temporary price movement and there is no fundamental reason behind it,’ said Ajay Parmar, head, Institutional Equities, Emkay Global Financial Services.
Thinksoft Global Services, an IT solutions provider, had come up with an IPO of 36,46,000 shares priced in a band of Rs 115-125. The company had to revise the band from Rs 120-130 after getting a lukewarm response on the first day. It was planning to mop up Rs 47.39 crore through the sale. The IPO was subscribed 2.57 times.
Although the stock made a dull debut at Rs 100, a discount of 20 per cent from the issue price of Rs 125, it has been on a continuous upmove since then. It has been traded heavily through various bulk deals between Rs 156-206 since Tuesday. According to the selling price data available at BSE, these clients are expected to have made profits of 20-60 per cent. The sharp price rise in Thinksoft comes despite broader markets having fallen from 17,000 levels. The Sensex has shed close to 980 points in the past five trading sessions. It closed down 1.42 per cent on Thursday to 16,052.72 points.
Some major IPOs that came this year are yet to move above their issue price. NHPC is trading at Rs 30.90, compared to its issue price of Rs 36. Similarly, Adani Power is trading at Rs 95.30, as against its issue price of Rs 100. Pipavav Shipyard, too, is no exception and is trading at Rs 54.25, as compared to its issue price of Rs 58 a share.