Oct 13, 2006, 11.21 AM IST | Source: CNBC-TV18

Stay away from Richa Knits

Sajiv Dhawan of JV Capital Services is of the view that one can stay away from Richa Knits.

Sajiv Dhawan of JV Capital Services is of the view that one can stay away from Richa Knits .

Dhavan told CNBC-TV18, "The management of Richa Knits is obviously going to be positive, if one see the subscription levels for the IPO, there is nothing to talk about. They are planning to put the money in two plants in Rajasthan and Gurgaon, so it is a tough sector. If ONE compare to the peers, what the management is saying, it does look cheap but the market I dont think buys this story at all at the moment, one needs some large investors or some institutions to come to the stock for the stock to get a re-rating and move upto higher levels."

He further added, "It is possible that it is relatively smallercaps or some vested interest could take the stock higher. So, if one is looking for a fundamental pick, stay away and if one is looking for some momentum and he/she is slightly higher risk trader then by all means take, not a slight investment call in it, but keep a stoploss because easy IPOs have a tendency to a bit volatile over the first few days, some do move up but some as recent past has shown do crack and they dont seem to recover very well." 

Disclosure: Analyst and his clients might have interest in above stock.

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