Tata Tech, Gandhar Oil settle above IPO price, Fedbank disappoints; what should investors do now?

Tata Technologies listed at a 140 percent premium and then rose nearly three-fold the IPO price

Tata Technologies, Gandhar Oil Refinery and Fedbank Financial Services listings kept the investors busy on November 30. While the former two made a bumper debut, the latter disappointed the market participants. What should investors do now? Let's check out brokerages' stance on these listings.

Tata Technologies listed at a 140 percent premium and then rose nearly three-fold the IPO price. The stock opened at Rs 1,200 and closed at Rs 1,327.7 on the NSE and on BSE, the stock started trading at Rs 1,199.95 and settled at Rs 1314.25, against the issue price of Rs 500.

“We believe that this strong listing was supported by the Tata parentage entity and its unique business model. The company remains a preferred choice as an Indian Engineering Service Provider (ESP). Also, the increasing demand for autonomous and connected technologies globally led by safety measures will keep the business prospects of the company at a sweet spot for the long term,” said Narendra Solanki, head of fundamental research at Anand Rathi Shares and Stock Brokers. Solanki suggests investors to hold the stock for the long term.

Gandhar Oil Refinery stock listed at a 75 percent premium over the IPO price, surpassing analysts' expectations of a 45-50 percent premium. The white oil manufacturer’s stock opened at Rs 295.40 on the BSE and at Rs 298 on the NSE, against an issue price of Rs 169 per share. The stock closed at Rs 301.5.

“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.

Fedbank Financial Services had a weak first day on the bourses, listing at Rs 137.75 on BSE, a 1.6 percent discount to the IPO price of Rs 140. The stock did recover to gain 5.7 percent to hit an intraday high of Rs 148 but pared gains to end the day at Rs 140.

“Though Fedbank Financial Services logged the third-fastest AUM growth among its peers and has an edge over them due to access to capital from its promoter Federal Bank, most of the positives are seemingly priced in at a P/BV of 3.3x on the upper price band based on FY23 book value,” Shreyansh Shah, Research Analyst, StoxBox, said. He favours re-considering the company at lower valuations.

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