Indo Farm Equipment shares made a healthy stock market debut to list at a premium of 19 percent over its issue price on January 7, following a bumper subscription of 227.57 times on its final bidding day on January 2 to its Rs 260.15-crore initial public offering (IPO).
The shares of Indo Farm Equipment, a manufacturer of tractors, pick-and-carry cranes, and other farm equipment, were listed at Rs 256 per share on the NSE, a healthy premium of 19.07 percent from its IPO price. The company's market market valuation post listing of shares stood at Rs 1,230.12 crore. The IPO was priced in the range of Rs 204-215 per share.
On the BSE, the shares of the company were listed at Rs 258.40 per share, a premium of 20.19 percent.
The grey market on January 7 was expecting a better listing at around 35 percent, however, the final listing of shares took at a premium of around 20 percent.
Indo Farm Equipment shares likely to list at 45% premium today; analysts suggest 'long-term hold'
Proceeds from the fresh issue will be used to set up a new dedicated unit for expansion of the company's pick & carry cranes manufacturing capacity, payment of debt, investment in the company's NBFC subsidiary Barota Finance for financing the augmentation of its capital base to meet its future capital requirements.
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Analysts acknowledged the high valuation but recommended medium- to long-term holding for investors who were allotted shares.
Narendra Solanki, Head of Fundamental Research at Anand Rathi Shares, echoed these views, stating that Indo Farm Equipment’s profitability could improve significantly once its expanded manufacturing facilities for pick-and-carry cranes are fully operational.
"Investors should consider booking partial profits on listing gains while holding a portion of their investment for long-term growth. The company’s traditional business model, experienced promoters, planned capacity expansion, and debt reduction efforts position it well for sustained success,” Solanki added.
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