SME stock hits 12th straight upper circuit; up 4x over IPO price in 12 days

Shares of Afcom Holdings were locked in 10-per cent upper circuit for the 12th straight trading day, at Rs 444.40 on the BSE in Wednesday's intraday trade. The stock had surged 99% on its listing day.

Shares of Afcom Holdings were locked in upper circuit for the 12th straight trading day on the BSE in Wednesday’s intra-day trade, after it surged 10 per cent to Rs 444.40.

The stock of this logistics solutions provider has frozen in upper circuit in all the trading days, since it listed in the BSE SME segment, and no sellers were seen on the counter even on Wednesday. 

Afcom Holdings had made a robust market debut on August 9, in the BSE SME segment, with the company’s shares getting listed at Rs 215.45, a 99 per cent premium over its issue price.

Currently, the company's stock is trading 311 per cent higher against its issue price of Rs 108 per share.

At 11:00 am, Afcom Holdings was trading 8 per cent higher at Rs 435, as compared to the 0.02 per cent rise in the BSE Sensex. The average trading volume on the counter had jumped over 10-fold.

As many as 1.26 million equity shares, representing 5 per cent of total equity of the company, have changed hands on the BSE, data from the exchanges showed.

Following the run-up in its stock price, the BSE had sought clarification from Afcom Holdings regarding the significant movement in its price on August 26, 2024, in order to ensure that investors have the latest relevant information about the company.

A reply from the company regarding the bourse's query is still awaited.

As a listed SME, the company will step into the threshold of BSE SME Platform and foray in to the world of finance for further growth and development. The BSE SME segment assists these companies to raise equity capital for their growth and expansion and thus helps them blossom into full fledged companies.

In due time, the company can even migrate to the Main Board of the BSE as per its existing rules and regulations.

Afcom Holdings operates cargo flights to the ASEAN countries, such as Singapore, Indonesia and Brunei, among others. The company is engaged in carriage of cargo on airport-to-airport basis. It has also appointed general sales and service agents (GSSAs) in India, Hong Kong, Singapore, Thailand, Japan, South Korea, China, and Taiwan.

Afcon Holdings, in its Red Herring Prospectus (RHP), had highlighted that it expects to grow its business through the acquisition of aircraft on dry lease basis, which will add to its current Boeing 737-800 aircraft. The company is in the process of acquiring additional aircraft through the proceeds of the issue.

The company also intends to increase the number of aircraft under its service to cater to the growing demands of this sector and facilitate growth.

The Indian logistics sector is one of the largest in the world and presents a large addressable opportunity, with a direct spend of $216 billion in fiscal 2020. The sector is expected to grow to $365 billion by fiscal 2026, at a compound annual growth rate (CAGR) of 9 per cent, driven by strong underlying economic growth and favourable regulatory environment in logistics.

This has resulted in the evolution of efficient supply chain formats, and led to an improvement in India’s transportation infrastructure, especially highway connectivity, the company's RHP had noted.

Further, the growth of the domestic manufacturing sector, driven by favourable policy support, increased domestic and foreign investments, and the rapid growth of India's digital economy, has led to the creation of digital-native business models such as ecommerce, direct-to-consumer and social commerce.

Also, growth in offline commerce driven by increased offline consumption, industrial activity and cross border trade, are expected to drive the sector's growth going forward, the company noted.