Rikhav Securities shares hit 5% upper circuit after listing at 90% premium on BSE SME; check how much return investors made

Shares of small and medium enterprise (SME) Rikhav Securities Ltd made a spectacular trading debut on the BSE SME platform on Wednesday, January 22, with the stock doubling over the issue price after listing.

The stock opened the session at ₹163.4 apiece, up 90% compared to the initial public offering (IPO) price of ₹86 per unit. Within minutes of the session's opening, the share price rose another 5% to hit the upper circuit limit of ₹171.57 apiece, almost doubling the IPO investors’ money.

In early trade, nearly 24.6 lakh shares changed hands on the BSE, with the total traded value reaching ₹41.62 crore. The company’s market capitalisation stood at nearly ₹657 crore.

As the minimum bid quantity to apply for the Rikhav Securities IPO was 1,600 shares, successful bidders who were allotted shares in the primary issue would have been sitting on listing gains of a whopping ₹1.24 lakh per lot (₹77.4 x 1,600) as soon as the stock started trading in the secondary markets.

The ₹88.82-crore BSE SME IPO of financial services provider Rikhav Securities Ltd was booked almost 307 times during the three-day subscription period from January 15 to January 17.

The public offer attracted applications for more than 211 crore shares against the net offer size of 68.83 lakh shares.

The retail portion was booked over 251 times, while the non-institutional investors’ (NIIs) segment was oversubscribed by more than 600 times. The qualified institutional buyers (QIBs) quota was bought nearly 171 times.

Ahead of the IPO's launch, Rikhav Securities also raised ₹25.11 crore in its anchor investor round. The company allotted 29.2 lakh shares to investors at a price of ₹86 per share.

The 100% book-built issue of Rikhav Securities combined a fresh issuance of 83.28 lakh shares and an offer-for-sale (OFS) of 20 lakh shares. The price band for the IPO was fixed at ₹82 to ₹86 per share, and the lot size was 1,600 shares.

In its red herring prospectus (RHP), the company proposes using the IPO proceeds to meet the capital expenditure requirements for purchasing IT software, computers, and laptops. A portion of the funds would also be used for working capital needs. The proceeds from the OFS components will go to selling shareholders.

Rikhav Securities offers financial services related to brokerage, proprietary investment services, and banking. It also provides facilities like broking, intra-day trading, cash delivery, futures, and options. It is involved in trading across various derivative and commodity segments.

The company is registered with the Securities and Exchange Board of India (Sebi) as a stock broker and holds memberships with the BSE, NSE, and the Multi Commodity Exchange of India Ltd (MCX).

In FY2024-25, for the six-month period ended September 2024, the company’s revenue stood at ₹92.85 crore. In comparison, full-year revenue was ₹104.16 crore for 2023-24 and ₹49.46 crore in 2022-23.

The company’s profit after tax (PAT) for the six-month period of FY25 was ₹50.37 crore. The same was ₹42.64 crore in FY24 and ₹19.1 crore in FY23.