Harsha Engineers was listed a premium of 36 per cent at Rs 450 on National Stock Exchange (NSE) against an issue price of Rs 330, whereas the scrip debut at Rs 444 on BSE, a premium of 35 per cent over the given issue price.
Post listing, the company extended its gains to rally another 10 per cent to hit an intraday high of Rs 486 on BSE, taking the total gains over listing above 47 per cent in a weak market.
However, analysts remain divided over the next move for the investors. A few suggest they book profits, whereas others consider it as a long term pick and accumulate it at corrections. Also, some experts see partial profit booking as a prudent idea.
Amarjeet Maurya, AVP – Midcaps, Angel One, who had suggested subscribing to the issue, advised investors to book profits as he sees limited room for further upside considering its post-listing valuations.
Rajnath Yadav, Research Analyst, Choice Broking also suggested investors to exit the counter. “We believe investors have received respectable gains on listing, factoring the volatility in the equity market,” he added.
Harsha Engineers raised Rs 755 crore via its initial stake sale, which remained open for subscription between September 14-16 and the company sold its shares in the range of Rs 314-330 apiece.
The issue was overall subscribed 74.7 times, with the quota of QIB investors fetching a whopping 178.26 times subscription. Portions for HNI, retailers and employees were subscribed 71.32 times, 17.63 times and 12.07 times, respectively.
Santosh Meena, Head of Research,
said that strong response led to listing gains but the stock is a strong candidate for long-term investing.
“The company is a proxy play on India becoming the global manufacturing hub,” he added. “Those who have received the shares can maintain a stop loss of Rs 400 and long-term investors can accumulate the stock on dips.”
Harsha Engineers International is the largest manufacturer of precision bearing cages, in terms of revenue, in the organised sector in India, and amongst the leading manufacturers of precision bearing cages in the world.
Astha Jain, Senior Research Analyst, Hem Securities said that investors can book partial profits amid the volatility in the broader markets but this stock is a long term pick.
“Investors may keep the shares for long term in their portfolio, and for fresh entry one should wait for the stock to breach listing price,” he added.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)