The shares of GNG Electronics made a strong market debut on July 30, listing at Rs 355 apiece on NSE. This marks a premium of nearly 50 percent over the IPO price of Rs 237 per share.
The listing premium is higher than grey market estimates. Ahead of listing, the unlisted shares of the company were trading with a grey market premium of nearly 38 percent over the IPO price at Rs 327 apiece, according to Investorgain.
The maiden public issue of GNG Electronics saw bumper investor interest during its three days of public bidding. The Rs 460-crore IPO was subscribed nearly 147 times its offer size between July 23 and July 25, with Qualified Institutional Buyers (QIBs) booking their reserved portion a whopping 266 times.
The refurbisher of laptops, desktops and other information and communication technology (ICT) devices had launched its public issue to raise Rs 460 crore through a fresh issue of shares worth up to Rs 400 crore, and an offer for sale of 255 crore shares. The company had set a price band of Rs 225-237 for the IPO which remained open for public bidding from July 23 to July 25.
Prashanth Tapse, Research Analyst at Mehta Equities, recommended investors to book profits. "GNG Electronics made a solid market debut, largely in line with our expectations, reflecting robust investor enthusiasm. However, post-listing valuations appear stretched, limiting immediate upside potential from current levels," he said.
"In light of this, we believe conservative investors should consider booking profits and capitalizing on the initial momentum. While Investors with a higher risk appetite or a long-term horizon may choose to HOLD, given the company’s scalable business model, strong positioning within the SME tech segment, and alignment with favourable sectoral trends. These fundamentals, in our view, support sustained long-term growth despite potential short-term volatility," he added.
Shivani Nyati, Head of Wealth at Swastika Investmart, meanwhile recommended investors to secure partial profits and retain the remainder with a stop-loss set at 280.
Mahesh M Ojha, AVP - Research and Business Development, Hensex Securities, said, "Short-term investors may partially book profits, while long-term investors should evaluate the company’s performance over the next two to three quarters before making further investment decisions," he said.
Narendra Solanki, Head - Fundamental Research (Investment Services), Anand Rathi Shares and Stock Brokers, said GNG Electronics may benefit from a first-mover advantage in the electronics refurbishment space, especially in B2B segments.
However, he cautioned that the business model is working capital intensive, with a lag between procurement and sales cycles. "We had recommended a ‘Subscribe – Long Term’ rating. Investors allotted shares could consider booking partial profits on listing and hold the remaining for long-term gains," Solanki added.
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