Should you reserve profits in Harsha Engineers or keep them for the long term?

New Delhi: despite a massive sell-off in wider markets, Harsha Engineers International (HEIL) made a remarkable IPO on Monday.

Harsha Engineers was listed with a premium of 36% at Rs 450 on the National Stock Exchange (NSE) against an issue price of Rs 330, while the certificate debuts at Rs 444 on BSE, a premium of 35% relative to the given issue price.

After listing, the company extended its gains to rally another 10% to hit an intraday high of 486 rupees on BSE, taking total gains from listing above 47% in a weak market.

However, analysts remain divided on investors’ next move. A few suggest that they book profits, while others see it as a long-term choice and accumulate it during corrections. Also, some experts consider partial profit booking a prudent idea.

Amarjeet Maurya, AVP – Midcaps, Angel One, who had suggested underwriting the issue, advised investors to book profits as he sees limited upside room given his post-listing valuations.

Rajnath Yadav, Research Analyst, Choice Broking also suggested investors exit the counter. “We believe investors received respectable gains on the listing given the volatility in the stock 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 each.

The issue was globally subscribed 74.7 times, with the QIB investor quota reaching a huge subscription of 178.26 times. Units for HNI, Retailers and Employees were subscribed 71.32 times, 17.63 times and 12.07 times respectively.

Santosh Meena, Research Manager,

said a strong response led to listing gains, but the stock is a good candidate for long-term investing.

“The company is playing a proxy game for India to become the global manufacturing hub,” he added. “Those who received the shares can maintain a stop loss of Rs 400 and long-term investors can accumulate the declining shares.”

Harsha Engineers International is the largest manufacturer of precision bearing cages, by revenue, in the organized sector in India, and among the leading manufacturers of precision bearing cages in the world.

Astha Jain, senior research analyst at Hem Securities, said investors may book partial profits amid broader market volatility, but this stock is a long-term pick.

“Investors can keep the stock in their portfolio for the long term, and for a new entry, you have to wait until the stock goes above the listing price,” he added.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)