IT cos soar, dull entry for SFBs in IPO mkt
Mumbai: Two out of three stocks that listed during a volatile trading session on Wednesday opened below their IPO prices with only one opening at a premium and having closed higher, leaving investors looking for listing gains disappointed.
While Rashi Peripherals Ltd, a distributor of technology brands, managed to open above its issue price and closed higher, the two small finance banks, Capital Small Finance Bank and Jana Small Finance Bank Ltd, opened below their IPO prices.
Mumbai-based Rashi Peripherals opened at ₹339.50 per share on the NSE, well above its issue price of ₹311. The stock climbed further, reaching a high of ₹342.70, before closing at ₹321.50, This positive response came after strong investor interest, with the IPO subscribed 59.71 times and exceeded the grey market premium, which had dropped from ₹83 on 8 February to ₹34 on Wednesday.
Capital Small Finance Bank opened at ₹430.25 apiece on the NSE, below its issue price of ₹468. The stock dipped by 10% intraday to ₹421, before closing down 7% at ₹435. Similarly, Jana Small Finance Bank opened at ₹396, below its issue price of ₹414, and even touched ₹365, a 12% decline. Despite Capital’s IPO being subscribed 4.17 times and Jana’s 18.50 times, the listing was a tepid one.
“The primary market is currently buoyant, but investors should be cautious in volatile and consolidating markets. For IPO stocks with stretched valuations, profit booking might occur, especially when quarterly results are awaited,” Kranthi Bathini, director of Equity Strategy at Wealth Mills Securities Pvt Ltd told Mint.
“However, if recent listings deliver better-than-expected results, these stocks can rebound. Investors who took positions for long-term investment can hold, while those seeking listing gains can consider booking profits when the stock bounces back,” he added.
Among these companies, Jana Small Finance Bank has the lowest P/E trailing ratio of 10.15 times. Rashi Peripherals has a P/E trailing ratio of 14.23 times, and Capital Small Finance Bank has the highest P/E trailing ratio of 19.35 times.
“We are immensely grateful to all our investors for their unwavering support and confidence in Rashi Peripherals. As we embark on this exciting journey, we remain steadfast in our dedication to delivering value and driving sustainable growth,” said Kapal Pansari, MD, Rashi Peripherals.
Rashi Peripherals raised the largest amount of fresh capital among the three, issuing 1.93 crore new shares for ₹600 crore. Jana Small Finance Bank followed with ₹462 crore through a fresh issue of 1.12 crore shares, alongside an offer for sale component of ₹108 crore. Capital Small Finance Bank’s IPO included a fresh issue of 96 lakh shares for ₹ 450 crore and an offer for sale of 15.6 lakh shares for ₹ 73.07 crore, bringing its total issue size to ₹523.07 crore.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
Download The Mint News App to get Daily Market Updates.
Published: 14 Feb 2024, 10:15 PM IST
