InvestorQ : Hi Diksha, I have a question as to why the stock of Star Health not crash on listing on Friday, despite getting undersubscribed?
Arusha Ray made post

Hi Diksha, I have a question as to why the stock of Star Health not crash on listing on Friday, despite getting undersubscribed?

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diksha shah answered.
5 months ago
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Let me put it this way. Stock prices are determined by market forces and quite often do not have much to do with subscriptions. There are several stocks that were just about subscribed but went on to give stellar returns. Macrotech is one such example. But for now, let me come back to your question. Yes, Star Health & Allied Insurance listed weak at a discount of -6.11%, but managed to close the day slightly above the IPO price.

This was despite the discount in the GMP as was evident ahead of the IPO. It may be recollected that the IPO was subscribed just 79% and the size of the IPO had to be eventually reduced by Rs.839 crore to be able to list the IPO. The stock listed at Rs.845 on NSE and Rs.848.80 on the BSE, showing discounts of -6.11% and -5.69% respectively. However, it closed on the NSE at Rs.901 and on the BSE at Rs.906.85.

Despite good volumes, the selling was successfully absorbed on Friday. But the real test of the stock may only be visible in the coming days. It was volatile on both exchanges and gyrated between Rs.828 on the downside and Rs.940 on the upside. The total traded value on the NSE on the day of listing was Rs.1,208 crore and it was the second most active stock in terms of value. Star Health had a listing day closing market cap of Rs.52,191 crore.

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