IPO of Dhillon Freight Career (symbolic photo) Image Credit Source: Google Gemini
Investors who were dreaming of earning a hefty through IPO in the stock market received a major setback on Tuesday. The shares of ‘Dhillon Freight Career’, a company associated with the business of logistics and transportation, listed with a huge loss of about 20% from their IPO price, which completely destroyed the enthusiasm of the investors. Alam was that even after the listing, the pressure of selling increased so much that the stock got a lower circuit and the loss of investors increased to 24%.
There was a lot of shattering on the listing
On Tuesday morning, when the shares of Dhillon Freight Career rang on the BSE SME platform, it was no less than a nightmare for investors. The company had fixed the issue price of its IPO at Rs 72 per share, but it started in the market at a price of Rs 57.6. That is, investors who were allotted shares, have lost 20% per share as soon as they opened.
Investors could not even recover from this shock of listing that there was such a competition of selling that the stock broke down 5% in a short time to his lower circuit of Rs 54.72. This means that the capital of those investing in IPOs decreased by about 24 percent in just a few hours. It was not surprising for the market experts, because before the listing, there was no enthusiasm about this stock in the gray market and its premium was going on, which was a clear indication of a weak start.
Small investors showed confidence
The overall reaction was received from investors about this small IPO of Rs 10.08 crore of Dhillon Freight Career and it was subscribed 2.91 times. But the thing to note is that the most confident of this IPO was shown by small i.e. retail investors. The reserved part for retail investors received bids up to 4.87 times.
On the other hand, big and institutional investors (Non-Intestial category) remained almost away from this IPO and their share could not be subscribed to. It is only 0.96 times full. This clearly shows that big and knowledgeable investors had some doubts about the evaluation or future of the company, while small investors often invest in market enthusiasm and today they suffered the most.
What does the company do?
Dhillon Freight Career is a transportation company, mainly the business-to-business (B2B) and the business-to-consumer (B2C) customers to carry freight. The company specializes in services like Les-Dan-Truk-Located (LTL) parcel transportation, contract logistics and fleet rental. Its major customers come from industries like textile, electrical goods, paint and footwear.
Currently, the company’s business is spread over West Bengal, Bihar, Delhi and Uttar Pradesh, for which it has its own fleet of 62 vehicles and a network of 22 offices. The company had planned to use Rs 7.67 crore out of Rs 10.08 crore raised through IPOs to buy new trucks and vehicles, upgrade technology and expand its capacity. The remaining amount was to be used for other general expenses of the company.
Disclaimer: This article is only for information and should not be considered as an investment advice in any way. TV9 India suggests its readers and spectators to consult their financial advisors before taking any decision related to money.