Gandhar Oil Refinery stock made a bumper debut, listing at a 75 percent premium over the IPO price, surpassing analysts' expectations of a 45-50 percent premium. Several analysts now suggest booking profit as they believe the valuation gap compared to peers has narrowed and hence expect limited upside from the current levels.
The white oil manufacturer’s stock opened at Rs 295.40 on the BSE and Rs 298 on the NSE, against an issue price of Rs 169 per share. The IPO comprised a fresh issue of shares worth Rs 302 crore and an offer-for-sale of 1.17 crore shares worth Rs 198.69 crore by promoter and investors. The price band for the offer was set at Rs 160-169.
Also Read: Bumper debut | Gandhar Oil Refinery lists at 75% premium to IPO price
The Rs 500.69 crore IPO was subscribed 64.07 times with bids coming in for 136.1 crore shares against 2.12 crore shares on the block. Qualified institutional buyers booked 129 times their quota of shares, retail investors booked 28.95 times, and high net-worth individuals 62.2. times.
Let's check out brokerages' stance on Gandhar Oil Refinery stock. Should you buy more, hold, or book profit?
Choice Broking: Book-profit
“At the current market price of Rs 304, the stock is trading at a P/E multiple of 16.9x. Considering the growth outlook and profitability margins, currently, the stock is fairly valued, thus investors are advised to book profit. Fresh buying is not recommended at this level,” said Rajnath Yadav, Research Analyst at Choice Broking.
Mehta Equities: Book listing day profit
“As expected, a solid listing gains above our expectation for a leading manufacturer of white oils, Gandhar Oil mainly on the back of reasonable IPO valuation when compared to its peers which were trading high,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
Tapse believes the valuation gap has narrowed to Gandhar peers and hence expects limited upside from the current levels. He recommends investors book listing day profits.
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Anand Rathi: Hold
Gandhar Oil catered to over 3,500 customers in FY23, including leading Indian and global companies such as Procter & Gamble (P&G), Unilever, Marico, Dabur, Encube, Patanjali Ayurved, Bajaj Consumer Care, Emami and Amrutanjan Healthcare, supported by their global supplier base and manufacturing operations in India and the United Arab Emirates. “We suggest investors hold the issue for long-term,” said Narendra Solanki, Head - Fundamental Research, Anand Rathi Shares and Stock Brokers.
Swastika Investmart: Book-profit
According to Shivani Nyati, Head of Wealth at Swastika Investmart, the strong responses from investors could be due to a number of factors, including the company's strong track record of growth and profitability, its diversified customer portfolio, and its strong distribution network.
“Overall, the listing of Gandhar Oil Refinery was a success. The company's strong fundamentals, robust demand for the IPO, and strong listing price suggest that the company is well-positioned for growth in the future. However, investors may consider booking profit,” said Nyati.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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