Orient Cables Hits Lower Circuit After Blockbuster Debut, Why Shares Have Tumbled Nearly 19% From Listing Price?

Mumbai: Orient Cables (India) shares came under heavy selling pressure on Tuesday, hitting the 10 percent lower circuit at Rs 364.50, just a day after making a blockbuster stock market debut.

The sharp reversal has drawn attention after the cable manufacturer's shares listed at a substantial premium to the initial public offering price. Profit-booking following the strong debut appears to have weighed on the counter.

Stock Falls Nearly 19 percent From Listing Price

Orient Cables had made its stock market debut on Monday at Rs 450 on the National Stock Exchange, representing a premium of around 65 per cent over the IPO issue price of Rs 272.

On the BSE, the shares opened at Rs 448.

However, the initial enthusiasm faded during the listing session, with the stock closing at Rs 405 on the NSE. Selling intensified on Tuesday, pushing the shares another 10 per cent lower to Rs 364.50, where the lower circuit was triggered.

At Tuesday's level, Orient Cables shares were nearly 19 per cent below their NSE listing price of Rs 450.

IPO Investors Still Sitting On Gains

Despite the steep two-session decline, investors who received shares at the IPO price remain in profit.

At Rs 364.50, the stock was still trading around 34 per cent above its final issue price of Rs 272. This means a substantial part of the listing gain remains intact despite the post-debut correction.

The price action suggests investors have been locking in gains after the stock's strong listing premium.

IPO Saw Heavy Investor Demand

Orient Cables launched its Rs 552-crore IPO between September 25 and September 29 at a price band of Rs 258 to Rs 272 per share.

The public issue consisted of a fresh issue worth Rs 320 crore and an offer for sale of Rs 232 crore.

Investor demand was robust, with the IPO subscribed 97.28 times overall. Qualified institutional buyers subscribed their portion 192.68 times, while the non-institutional investor category received 121.90 times subscription.

Retail investors subscribed their reserved portion 32.21 times. Shares were allotted on September 30 before listing on the NSE and BSE on October 5.

What Does Orient Cables Do?

Orient Cables is a business-to-business manufacturer of networking cables and passive networking equipment.

Its products cater to telecommunications, broadband infrastructure, data centres, renewable energy, smart building automation, fast-moving electrical goods, automotive and e-mobility sectors.

The company also has an overseas presence, exporting products to markets including the UAE, Qatar, the US, Australia, New Zealand, Nepal, Singapore and the Netherlands.