NewKerala.com

Riddhi Display's Weak Debut: Why Shares Listed at 20% Discount Despite Strong Retail Demand

Riddhi Display Equipment had a disappointing start on the stock market. Its shares listed at Rs 80, which was a full 20% lower than the issue price. This weak debut happened even though retail investors showed strong interest during the subscription period. The company plans to use the raised funds to expand its manufacturing operations.

Key Points: Riddhi Display Shares List at 20% Discount on BSE SME Platform

  • Shares listed at Rs 80, a significant 20% discount to the Rs 100 issue price
  • The overall IPO was subscribed 4.91 times, with strong 8x retail interest
  • Proceeds will fund a new manufacturing unit in Lucknow and upgrade existing facilities
  • The muted listing defied grey market trends which had predicted a flat debut
2 min read

Riddhi Display shares list at 20 pc discount at Rs 80

Riddhi Display Equipment shares debuted at Rs 80, a 20% discount to its Rs 100 issue price, despite the IPO being subscribed nearly 5 times.

"The stock was listed on the BSE SME platform at Rs 80 per share, which was a discount of 20 per cent compared to its issue price of Rs 100."

Mumbai, Dec 15

Riddhi Display Equipment shares made a weak debut on the Indian stock market on Monday, disappointing investors.

The stock was listed on the BSE SME platform at Rs 80 per share, which was a discount of 20 per cent compared to its issue price of Rs 100.

The muted listing came despite expectations of a flat debut in line with the issue price. In the grey market, Riddhi Display’s IPO was trading at a premium of zero, indicating a likely listing around Rs 100.

However, the stock failed to meet those expectations and opened significantly lower.

The Riddhi Display SME IPO received a moderate response from investors during the three-day bidding period.

The issue was subscribed 4.91 times overall. Retail investors showed strong interest, with their portion subscribed nearly eight times.

The non-institutional investor segment was subscribed 1.92 times, while qualified institutional buyers placed bids worth 2.19 times their allotted quota.

The IPO opened for subscription on December 8 and closed on December 10, with the allotment finalised shortly after. The company made its stock market debut on December 15 on the BSE SME platform.

Riddhi Display had set a price band of Rs 95 to Rs 100 per share and raised Rs 24.68 crore through a fresh issue of 25 lakh equity shares.

There was no offer-for-sale component in the IPO. Investors had to apply in lots of 1,200 shares, which meant a minimum investment of Rs 2.4 lakh at the upper end of the price band.

The company plans to use the IPO proceeds to expand its operations. A significant portion of the funds will be used for interior development and the purchase of machinery for a new manufacturing and assembly unit in Lucknow, Uttar Pradesh.

The remaining funds will go toward upgrading machinery and software at its existing Gondal facility in Gujarat, setting up a showroom in Gondal, meeting working capital needs and supporting general corporate purposes.

The IPO was managed by Jawa Capital Services Pvt. Ltd. as the book-running lead manager, while Maashitla Securities Pvt. Ltd. acted as the registrar. Prabhat Financial Services Ltd. served as the market maker for the issue.

- IANS

Share this article:

Reader Comments

P
Priya S
Feeling the pain of those who invested at Rs 100. A 20% discount on day one is brutal. The company's plans for Lucknow and Gondal seem solid on paper, but the market clearly lacks confidence in their execution. Hope it recovers for the sake of small investors.
R
Rohit P
Minimum investment was 2.4 lakhs! That's a big amount for a retail investor to put into an SME IPO. The high valuation at issue price was a red flag. Maybe now at Rs 80 it becomes an interesting bet for the long term if they deliver on expansion. 🤔
S
Sarah B
As an NRI following Indian markets, this highlights the inherent risk in IPOs, especially on SME platforms. The oversubscription by retail (8x!) often creates hype detached from fundamentals. Due diligence is key, not just following the crowd.
V
Vikram M
The company is in the display equipment business, which has potential with digital signage growing. But listing at a 20% cut shows maybe the issue price was too ambitious. Let's see how they use the funds in UP and Gujarat. Could be a good entry point now for patient investors.
K
Karthik V
Respectfully, the lead managers and market makers need to do a better job of pricing these issues. A 20% listing loss hurts market sentiment for other SMEs waiting to list. It discourages genuine small investors from participating in the primary market.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50