Heranba Industries Trading Day Strategy: High Gray Market Premium; reserve profits or hold for the long term?

Agrochemicals maker Heranba Industries is set to go public on March 5, 2021. The Rs 625 crore IPO was subscribed 83.29 times during the three-day bidding process. The issue was sold in the range of Rs 626-627 per share. On Thursday in the gray market, shares of Heranba Industries were seen at a premium of Rs 230 to the IPO price. Heranba Industries shares were trading at 857 rupees each, implying a 37% gray market premium to its issue price. “Since the gray market premium reflects a certain amount of listing gains, we can expect more than 30% listing gains on March 5,” said Likhita Chepa, senior research analyst at CapitalVia Global Research. Limited, at Financial Express Online.

The oversubscription in the Heranba Industries issue was mainly driven by Qualified Institutional Buyers (QIBs) and retail investors also showed strong interest. The Heranba Industries issue’s valuations were reasonable relative to its peers. Chepa added that investors who subscribed to the show for listing gains can consider booking profits. Long-term investors may consider keeping it as it is a leading manufacturer of crop protection chemicals and a market leader in the production of synthetic pyrethroids. “Increased global food demand would increase opportunities for crop protection actors and Heranba is well positioned to reap the benefits,” Chepa said. With its strong financial performance and in-house R&D team for product development and improvisation, its outlook looks positive, making it a long-term bet.

When subscribing to the IPO, the non-institutional investors category was the highest bidder, subscribing it 271.2 times, followed by QIBs 67.5 times. The retail investor category subscribed 11.8 times its reserved share. Aditya Kondawar, Founder and COO, JST Investments had given an IPO of crop protection chemicals maker Heranba Industries an avoid rating given a few failings. “We suggest you reserve the profits if you got the IPO attribution,” Kondawar told Financial Express Online.

Even though the current market sentiment is bullish, AR Ramachandran, co-founder and trainer, Tips2Trades advised allocated investors to reserve some of the profits in Heranba Industries on the gain list as market volatility is here to stay. “A decent drop of at least 10-15% should then be used to add more Heranba Industries to your portfolio,” Ramachandran added.

Abhay Doshi, founder of UnlistedArena.com, which specializes in pre-IPO and unlisted stocks, told Financial Express Online that due to reasonable valuations and a booming chemicals sector, Heranba Industries is expected to list at a premium. important. “I expect the shares to be in the range of Rs 840-860, implying a gain of 35-40%, which is pretty decent,” Doshi said. “In my opinion, I would choose to book profits on listing because there are strong options available in this space with a proven track record,” he added.