Despite 53x Subscription, Capillary Technologies Shares List at 3% Discount - What’s Next?

Capillary Technologies' IPO shares made their public debut today, listing at ₹560 on the BSE, around 3% below the IPO price of ₹577, and touched an early high of ₹633.

This blog will help you understand how Capillary Technologies’ IPO performed on its first listing day, what influenced the share price movements, and why the anchor investors’ lock-in period matters for future price trends, to help you make an informed investment decision.

Key Facts and First-Day Trends

• IPO Price: ₹577 per share
• Listing Price: ₹560 per share (2.9% below issue price)
• Day’s High: ₹633 per share
• Market Capitalization (post-IPO): ~₹4,600 crore
• Track the live share price of Capillary Technologies here.

The stock is listed at a slight discount, indicating some early selling or cautious sentiment. However, a swift rise to ₹633 showed that buyers quickly stepped in, possibly looking for short-term gains. As of 1 PM, the share is trading near ₹600 on the BSE.

What Drives the First-Day Price Movement?

• Investor sentiment was calm with no significant premium before listing, leading to a steady start.
• Some traders are taking profits early, which can cause the usual price swings seen on listing day.
• When the broader market performs well, new IPOs often enjoy brisk buying activity.

Anchor Investor Lock-in: Why It Matters

Anchor investors like institutions or funds often buy a large chunk before the IPO. Their 50% shares are usually “locked in” for 30 days, and the remaining 50% for 90 days post-listing by SEBI.

For Capillary, the first expiry date is expected to be December 21, 2025.

What happens at expiry?

• Anchors sometimes sell after the lock-in ends, leading to sudden supply and short-term pressure on prices.
• Historically, some IPOs saw post-lock-in dips if anchors exited, though there’s no fixed rule.
• Retail investors might see volatility around the expiry, good to watch volumes and prices closely during this time.

Future Potential: Facts to Help Assess

Capillary Technologies India Limited is a tech business with global clients and rising profitability. The company turned profitable for the first time, with ₹14.2 crore in profit for FY25, Net Revenue Retention at 121%, and solid growth from ₹266 crore in FY23 to ₹612 crore in FY25.

Strengths:

• Loyal, repeat customers across 47 countries
• Fast cost recovery, with a payback period of ~16 months
• High subscription margins (66.36%)

Risks:

• High dependence on top clients (56% of revenue from 10 customers)
• Aggressive valuation: P/E 327x vs peers at 34x (means shares may be “expensive” if growth slows)
• Exposure to North America and rising customer acquisition costs

Also Read: Capillary Technologies Review and Why It Matters

What Can Be Expected Next?

The company sits in a fast-growing global loyalty market. If Capillary keeps growing profits and stays ahead in tech, its stock may justify the premium long-term. But price swings and anchor lock-in expiry may bring short-term volatility. Already, the debut was muted, and a big jump to ₹633.9 came fast. Retail buyers should watch how institutions behave post-lock-in in December.

• Don’t chase hype, wait for the anchor lock-in expiry to see if big investors hold or sell.
• Track next quarterly results and global peer trends for signs of growth or risk.
• Remember, high valuations mean the market expects future success; any slowdown could hit the price.

Should You Hold or Sell?

It seems the initial listing price slightly below the IPO indicates cautious selling, but the quick jump shows early buyers betting on upside. For short-term traders, this may signal some opportunity to take profits or watch price swings carefully, especially with the anchor investor lock-in expiry coming in about a month. Historically, big investors selling after lock-in can create price dips, so price volatility might increase.

For long-term investors, Capillary Technologies has promising fundamentals, growing profits, loyal clients, and a fast-expanding market. Yet, the current high valuation (P/E around 327x) suggests expectations are very steep. It might be wise to stay patient and watch quarterly results and client expansions closely before deciding to add more. The company’s reliance on a few big customers and concentration in North America also pose risks to keep an eye on.

For more IPOs, check INDmoney’s IPO tracker here.

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