Phoenix Overseas made a subdued debut on the NSE SME platform on Friday, 27 September, with shares listing at ₹64 apiece, their issue price. The company's stock opened flat and soon saw a 5% decline, hitting the lower circuit at ₹60.8 per share due to selling pressure. Investors who were looking to invest in stocks had mixed reactions to the listing.
Early trade performance
In the early hours of trading, Phoenix Overseas recorded a significant volume of activity, with over 15.96 lakh shares traded. This translated to a total traded value of ₹10.18 crore. Despite the lower circuit hit, the company's market capitalisation stood at ₹117.62 crore, as per NSE data at 10:30 a.m. The lower circuit reflects a restricted downward movement in share price, preventing further falls.
Phoenix Overseas IPO details
Phoenix Overseas raised ₹36.03 crore through its initial public offering (IPO), which was open for bidding from 20 to 24 September. The IPO consisted of a fresh issue of 45.8 lakh shares, amounting to ₹29.31 crore, alongside an offer-for-sale (OFS) of 10.5 lakh shares, worth ₹6.72 crore. The price band for the IPO was set between ₹61 and ₹64 per share, with a minimum lot size of 2,000 shares for investors.
The IPO witnessed strong demand across all investor categories, being subscribed over 123 times. Retail investors showed remarkable interest, with the retail quota subscribed 157 times, receiving bids for 35.46 crore shares against the 22.46 lakh shares allocated to the category. Non-Institutional Investors (NIIs) were also keen, subscribing 110 times, while the Qualified Institutional Buyers (QIBs) quota saw bids 65.7 times the available shares.
Market outlook after listing
Despite the strong demand during the IPO, Phoenix Overseas' listing performance has been underwhelming, as reflected by the immediate fall to the lower circuit. The early market movement indicates that investors may have expected more robust post-listing performance, especially after such high subscription levels. However, selling pressure quickly emerged, resulting in a downward adjustment.
Many analysts had speculated about the possibility of volatility during the initial trading period. While the IPO attracted attention, the opening price did not offer any listing gains, which may have triggered some selling activity.
Phoenix Overseas IPO objectives
Phoenix Overseas plans to use ₹10 crore from the IPO proceeds to meet its working capital needs, while approximately ₹6 crore will be directed towards funding inorganic growth opportunities. In addition, the company intends to invest in equity shares of a new entity involved in crude oil refining, marking its expansion into the energy sector.
Founded in 2002, Phoenix Overseas primarily trades in agricultural products and animal feed, including commodities such as corn, oil cakes, and spices. The company has built a strong foothold in the domestic market, and with this IPO, it aims to enhance its operations and explore new growth avenues.
Phoenix Overseas's listing day performance highlights the unpredictability of market reactions post-IPO, especially for those looking to invest in stocks. While demand during the IPO was strong, market sentiment quickly shifted, causing a sharp drop in share price. Investors will be watching closely to see if the stock can recover from the lower circuit and deliver better returns in the future.
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