Tata Tech soars 163%, registers highest listing gain in two years

Gandhar Oil Refinery (India) Ltd also saw an impressive listing gain of 78.4%, while renewable energy financier Indian Renewable Energy Development Agency Ltd (Ireda) witnessed solid gains for the second straight day since listing. Fedbank Financial Services Ltd (Fedfina) had a tepid debut, closing near its issue price.

Tata Technologies, the first Tata group company to list in almost two decades, opened with a 140% gain at ₹1,199.95 before rising further, reflecting strong demand despite the rich valuations of 85 times trailing price to earnings multiple against 32.53 times prior to the listing. It was the second-most traded stock on National Stock Exchange of India (NSE), with a trading volume of ₹6,114.07 crore.

Despite the lofty valuations, investors queued up to buy the stock on the secondary market, with delivery volumes at 46% on NSE and 45% on BSE.

“It’s madness,” said Ambareesh Baliga, independent market analyst, pointing to the demand despite its steep valuations. “Tata Technologies and other IPOs (initial public offerings) such as Gandhar and Ireda were not cheaply priced, but the investor appetite for these stocks shows the momentum and liquidity-driven nature of this market .”

Momentum refers to the short-term trading interest of retail and high-net-worth investors (HNIs) who are flush with liquidity, after the almost 50% rally in the Nifty Smallcap 250 index and 40% in the Nifty Midcap 150 index from the lows of 20 March.

However, a mutual fund official who is also anchor investor to the issue, said despite its “rich valuation”, the Tata Technologies stock was one “desired” by the market given the pedigree and the nature of its business.

Anchor investors, who got full allotment, unlike the retail and HNI category, who were picked by lottery, are sitting on handsome gains. They have a 30-day lock-in period, after which they can sell half of their holding, and the rest after 90 days.

Another shareholder with an over three-time notional gain is US-based private equity fund TPG, to whom Tata Technologies sold a 9% stake at a near 20% discount to the issue price for ₹1,467 crore. Its holding at Thursday’s closing was worth a whopping ₹4,798 crore.

Gandhar Oil Refinery closed at a 78.4% premium of ₹301.4 against an issue price of ₹169. The company witnessed delivery volume of 42%.

The IPO that had a tepid listing was Fedfina, which closed at ₹140.25, almost unchanged from its issue price of ₹140. The share witnessed delivery volume of 45.73%.

Ireda, which debuted at ₹59.99 against an issue price of ₹32 on 29 November, spurted almost 9% on Thursday at ₹65.30. Gandhar and Ireda featured among the top 25 traded stocks on NSE, posting a turnover of ₹1,178 crore and ₹2,584.18 crore, respectively.

Net purchases by foreign portfolio investors hit a provisional ₹8,148 crore, driving NSE’s turnover to a record ₹1.68 trillion.

This came after the MSCI index rebalancing took effect on Thursday, with the addition of nine more stocks to the MSCI Global Standard Index.

The addition is expected to attract passive inflows of as much as $1.5 billion. The NSE’s benchmark Nifty index closed 0.18% higher at 20,133 points.

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Updated: 01 Dec 2023, 12:23 AM IST