The listing of Sundrex Oil Company shares turned out to be disappointing for investors.
The company’s shares were listed on the NSE Emerge platform on Tuesday, December 30, at ₹68.80, which was nearly 20 percent lower than the IPO price of ₹86.
As a result, investors in this SME IPO faced a loss of around 20 percent on the day of listing. After the weak debut, the company’s market capitalization stood at approximately ₹92.15 crore.
Gray Market Had Already Given Warning Signs
Even before the listing, enthusiasm for the stock had faded in the gray market. The gray market premium (GMP) had dropped to zero, showing that investors were becoming cautious about the stock’s performance.
According to data from Investorgain, Sundrex Oil Company’s unlisted shares were trading at ₹86 before listing, which meant there was no premium over the IPO price.
Notably, the GMP had earlier reached around 19.77 percent a day before the IPO opened, but it fell sharply once the bidding process began. IPO Watch also reported that the shares were not trading at any premium in the unlisted market.
Complete Details of Sundrex Oil Company IPO
Sundrex Oil Company launched its IPO earlier this month through a completely fresh issue to raise ₹32 crore. The IPO price band was fixed between ₹81 and ₹86 per share.
Investors had to apply for a minimum of 3,200 shares, which required an investment of about ₹2.75 lakh at the upper price band. Additional bids could be made in multiples of 1,600 shares.
The IPO was open for subscription from December 22 to December 24 and was fully subscribed within three days. Retail investors showed the highest interest, subscribing nearly twice their reserved quota.
How the IPO Funds Will Be Used
The company stated that the funds raised through the IPO would be used mainly for working capital requirements, capital expenditure,
and partial or full repayment of certain secured and unsecured loans. The remaining funds will be used for general corporate purposes and to meet IPO-related expenses.