Shanti Gold shares expected to list with up to 17% premium over IPO price; here's a post-listing strategy

Shanti Gold shares expected to list with up to 17% premium over IPO price.

Shanti Gold International shares are set to debut on the stock exchanges on August 1, following strong demand in its initial public offering (IPO), which was subscribed 80.80 times during the offer period from July 25 to 29.

The Rs 360-crore Shanti Gold International IPO was priced in a band of Rs 189-199 per share. The issue comprises a fresh issue of 1.81 crore equity shares with no offer-for-sale component.

According to grey market trackers, the company’s shares are quoting a premium of around 17 percent. Market platform Investorgain indicated a grey market premium (GMP) of Rs 34, implying a potential listing gain of 17.09 percent over the issue price.

Analysts advise a long-term approach for investors allocated shares in the IPO.

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Narendra Solanki, Head – Fundamental Research, Investment Services at Anand Rathi Shares and Stock Brokers, said the company is a prominent manufacturer of 22kt CZ casting gold jewellery with a business-to-business model. It supplies to major corporate jewellery brands and wholesale buyers across India and select overseas markets.

Solanki added that the company operates an integrated manufacturing setup, backed by strong CAD-led design capabilities, and offers a wide range of products including bangles, rings, necklaces and bridal sets. "We expect the company to list at a premium given the current grey market trend," he said.

At the upper end of the price band, Shanti Gold is valued at 25.7 times its FY25 estimated earnings, with a post-issue market capitalisation of Rs 1,434.7 crore. The company services 15 states and one union territory and has branch offices in cities such as Mumbai, Bengaluru, Chennai and Hyderabad. It also counts brands like Joyalukkas, Lalitha Jewellery and Alukkas Enterprises among its clients.

Mahesh M Ojha, AVP – Research & Business Development at Hensex Securities Pvt Ltd, said short-term investors may consider booking partial profits on listing. "Expecting some listing gain of 10-12 percent. Short-term investors can book, long-term investors can hold. Fresh investors should wait for some price stabilisation post listing," he said.

The IPO proceeds will be used for setting up a manufacturing facility in Jaipur, meeting incremental working capital needs, repayment of debt and general corporate purposes.