Rashi Peripherals lists at 9% premium to IPO price. Should you buy, hold or book profit?

Rashi Peripherals IPO: Earlier today, the stock was commanding a 13 percent premium in the grey market

Rashi Peripherals stock listed at a 9 percent premium over the IPO price on February 14, missing analysts' expectations of a double-digit premium. The stock opened at Rs 339.5 on the National Stock Exchange and Rs 335 on the BSE against the issue price of Rs 311.

The stock was commanding a 13 percent premium in the grey market, an unofficial platform where stocks begin to trade well before the allotment in the IPO. It is normally tracked to get an idea of the listing price.

Also Read: All you need to know about Rashi Peripherals IPO

Rashi Peripherals did well in FY21 and FY22 due to a surge in demand for products. In FY23, though it marked a higher top line, it posted lower bottom lines due to reduced margins after vanning out of Pandemic euphoria.

“Its H1-FY24 performance indicates the restoration of trends, and the management is confident of maintaining the earning trends. Considering its plans, investors may park funds for medium to long-term rewards,” said Amit Goel, Co-Founder and Chief Global Strategist, Pace 360.

The Rs 600-crore IPO, entirely a fresh issue of 1.93 crore shares, was subscribed 59.71 times. In the pre-IPO placement, Volrado Venture Partners Fund-III-BETA and ace investor Madhusudan Kela's wife Madhuri Madhusudan Kela invested Rs 100 crore and Rs 50 crore, respectively. The price band for the issue was fixed at Rs 295-311 a share.

“We expect the company to benefit from a current rising demand scenario in the long term. However, given the highly competitive environment and thin margins of the business, we recommend investors who are allotted the shares reap the benefits of listing gains,” said Parth Shah, Research Analyst, StoxBox.

Also Read: Rashi Peripherals IPO: 10 things to know about the Rs 600-crore issue

The company will use Rs 326 crore to pay off loans and Rs 220 crore to meet working capital requirements. The remaining funds will be used for general corporate purposes.

Rashi Peripherals is a national distribution partner for global technology brands in India for information and communication technology (ICT) products. It primarily operates the following two business verticals — Personal Computing, Enterprise and Cloud Solutions (PES) and Lifestyle and IT Essentials (LIT).

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