Investors seemed to be in a queue to lap up Paras Defence shares as the stock remained frozen at the upper circuit on its listing day (October 1) since the beginning of trade at 10 am till the market close.
It opened and closed at Rs 498.75, which was also its intraday high, registering a whopping 185 percent rally over the issue price of Rs 175 per share on the BSE.
Further, it was locked in at a 5 percent upper circuit compared to its pre-opening price of Rs 475. It traded with a volume of 28.89 lakh equity shares on the bourses.
Owing to the issue size below Rs 250 crore, the stock is included in the trade-to-trade (T2T) segment where generally the stock has a 5 percent upper/lower circuit.
Paras Defence and Space Technologies is the first stock in the current decade that has given a massive 185 percent returns to investors on its debut day. It turned out to be a good wealth creator in short period of time. The investment of Rs 14,875 for 85 shares (one lot) is worth Rs 42,393.75 now.
"Paras Defence and Space Technologies made a bumper debut today. The IPO got a tremendous response from investors and got subscribed 304.26 times. We had also given a 'subscribe' rating for the issue due to its robust business model with niche product profile, strong research & development capabilities, getting benefits from government initiatives and continuous expansion," said Mohit Nigam, Head - PMS at Hem Securities.
Overall, Nigam believes the stock is very good for long-term investment. "This stellar listing is largely on expected lines."
Paras Defence has a niche products profile & technology and is one of the leading "Indigenously Designed Developed and Manufactured" category private sector companies in India. Hence, experts feel the company is expected to benefit from the "Atmanirbhar Bharat" and "Make in India" initiatives by the government.
It is engaged in designing, developing, manufacturing and testing a wide range of defence and space engineering products and solutions, having a current order book of Rs 305 crore which gives good revenue visibility. It has a diversified customer base including Bharat Dynamics, Bharat Electronics, Hindustan Aeronautics, Tata Consultancy Services, Astra-Rafael Comsys, Solar Industries India, Alpha Design Technologies, Advanced Mechanical and Optical Systems (AMOS), Belgium, Chaban (Israel), Tae Young Optics Company Limited (South Korea), and Green Optics (South Korea).
Salasar Techno Engineering was the second-biggest gainer with 139.95 percent gains on listing day, followed by Astron Paper & Board Mill (139.40 percent), Burger King India (130.67 percent), IRCTC (127.69 percent), Happiest Minds Technologies (123.49 percent), Avenue Supermarts (114.30 percent), Tatva Chintan Pharma Chem (113.32 percent).
Among others, Indigo Paints, G R Infraprojects, Mrs Bectors Food Specialities, and Fineotex Chemical registered between 101-109 percent gains on the debut day.