NEW DELHI: Companies coming out with initial public offerings (IPOs) are making hay as the equity markets continue to shine.
Following the gains made by Sona Comstar and Shyam Metalics and Energy Limited, that got listed last week, Dodla Dairy and Krishna Institute of Medical Sciences (KIMS) made a strong debut on Monday.
Dodla Dairy shares were listed at Rs 528 a piece, a 23 per cent premium to the issue price.
The stock then gained another 15 per cent and closed the session at Rs 609 on the BSE, a 42 per cent premium to its issue price.
KIMS, on the other hand, got listed at Rs 1,009, a 22 per cent gain over its issue price.
After the initial gain, the stock witnessed a small correction and ended the session at Rs 996, up 21 per cent.
Analysts, however, raised concerns about Dodla’s steep valuation and advised investors to book profits.
“The stock is up 41 per cent from the higher end of the price band. At current market price of Rs 605, the stock is trading at 23.2x PE ( 9MFY21 annualised profit ) which leaves little room for upside. Hence, we recommend to book profits,” said Amarjeet Maurya, AVP-Mid Caps, Angel Broking.
Siji Philip, senior research analyst at Axis Securities said that short-term investors, who had applied for an IPO for listing gains, can book profits if the listing debut was strong.
“Some of the listings such as Sona Comstar made a tepid listing debut due to expensive pricing. However, these can be accumulated if the valuations move into an attractive space,” Philip added.