On the National Stock Exchange (NSE), the certificate was listed at Rs 570, a premium of 250%. The script then rose another 5% to Rs 603.75, bringing its trading day gains to 270 percent on both exchanges. After this successful listing, investors wonder if they should record profits or keep the stock to increase the gains.
Astha Jain, senior research analyst, Hem Securities, suggested investors make a profit and sell around 70 to 75 percent of their holdings. “It is better to take some profit off the table after such registrations and keep the remaining part for a longer period,” she added.
The initial sale of Sigachi Industries’ stake was open for subscription from November 1 to 3. He raised Rs 125.43 crore via the main road, selling his shares in the range of Rs 161 to Rs 163 apiece.
Vikas Jain, Senior Research Analyst, Reliance Securities, urged investors to book profit and get off the counter as the stock has made a great start, thanks to strong demand for IPOs and small issues. “The script is listed in the trade-to-trade segment and will continue to stay there for a few more sessions. So, it is better to book profits, anticipating volatility,” he added.
The script has been added to the T segment or trade so the daily circuit limit is only 5% and will remain so for future sessions. Prior to listing, the script commanded a gray market premium of Rs 220-230, hinting at a solid start on Dalal Street.
Investors can make profits in a certain part and keep the rest for the long term because the company has a virtual monopoly and its products were in demand, said Akhil Rathi, vice president of advice at Marwadi Shares and Finance.
The issue received a warm welcome from investors as it was subscribed approximately 102 times. The quota for qualified institutional buyers was subscribed 86.5 times, while the quota for retail buyers was subscribed 80.5 times. The share of HNI investors was subscribed 172.43 times.
Vishal Balabhadruni, BFSI analyst at CapitalVia Global Research, said Sigachi Industries seemed like a good long-term investment and could be owned by investors. Short-term investors should see price gains, while long-term investors should wait for corrections, he added.
Sigachi Industries, based in Hyderabad, manufactures microcrystalline cellulose (MCC), which has varied applications in the pharmaceutical, food, nutraceutical and cosmetic industries.
Long-term investors need to stay invested, given the company’s niche product offering, said Rahul Sharma, co-founder of Equity99. “However, given the price premium, short-term investors are advised to make a profit.”