IPO Shock: Tuesday proved disappointing for investors hoping to make big money through an IPO. Shares of logistics and transportation visitor Dhillon Freight Carriers listed at a price nearly 20% lower than their IPO price. Immediately without listing, selling pressure intensified, pushing the stock into lower circuit, resulting in losses of up to 24% for investors.
Investors' hopes dashed upon listing
When Dhillon Freight Carriers' shares were listed on the BSE's SME platform on Tuesday morning, it was nothing short of a nightmare for investors. The visitor had set an issue price of 72 per share for its IPO, but the stock opened at 57.6. This meant that investors allotted shares suffered a 20% loss upon opening. Selling pressure intensified, and the stock soon reached a lower spin of 54.72. Investors who invested in the IPO lost 24% of their wanted in just a few hours. Market experts said this wasn't surprising, as there was no enthusiasm for the stock plane in the gray market, and the premium was zero.
Small Investors Show Confidence, Large Investors Stay Away
Dhillon Freight Carrier's small IPO of 10.08 crore was subscribed 2.91 times overall. Retail investors, i.e., Dhillon Freight Carriers, showed the greatest enthusiasm. The portion reserved for retail investors received bids of 4.87 times. Meanwhile, large and institutional investors (non-institutional) stayed away, with their portion stuff subscribed only 0.96 times. This unmistakably indicates that large investors were skeptical well-nigh the company's valuation or future, while small investors invested in excitement, suffering the greatest losses.
Company and Business Information
Dhillon Freight Carriers is a transportation visitor that provides freight services to B2B and B2C customers. The visitor specializes in LTL parcel transportation, contract logistics, and squadron rental. Its major customers are from industries such as textiles, electrical goods, paints, and footwear. The company's operations currently span West Bengal, Bihar, Delhi, and Uttar Pradesh. It has a squadron of 62 vehicles and a network of 22 offices. Of the 10.08 crore raised through the IPO, 7.67 crore will be used to purchase new trucks and vehicles, technology upgrades, and topics expansion. The remaining value will be used for unstipulated expenses.
