Tata Technologies made a bumper debut, listing at a 140 percent premium and then rising nearly three-fold the IPO price. The stock opened at Rs 1,200 on the NSE and at Rs 1,199.95 on the BSE, while its issue price was Rs 500. It jumped 180 percent over the IPO price to Rs 1,400 within minutes.
Given the growth potential in outsourcing, analysts expect the company’s business model to remain in great demand going forward. Analysts recommend investors to hold the stock for the long term, and for those who failed to get allotment to accumulate on dips.
“As expected, a bumper listing above our expectations respects the legacy of the Tata brand. After witnessing a remarkable subscription demand. Tata Technologies garnered significant attention in the stock market among the five IPOs. Considering overwhelming investors' demand along with investor-friendly pricing indicate Tata Group's legacy to reward shareholders,” said Prashanth Tapse, research analyst and senior vice-president of research at Mehta Equities.
Also read: Tata Tech doubles investors' wealth, lists at 140% premium over IPO price
Let's check out what brokerages have to advise on the Tata Technologies stock. Should you buy more, hold, or book profit?
Anand Rathi: Hold
“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.
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Choice Broking: Short-term investors can book profit
“Tata Tech is a long-term play. At a CMP of Rs 1,337, the stock is trading at a P/E multiple of 75.6x, which seems to be in line with the peers. Thus short-term investors are advised to book profit, while long-term investors can remain invested. Long only investors can consider investment at this level,” said Rajnath Yadav, Research Analyst at Choice Broking.
Mehta Equities: Accumulate on dips
Given the growth potential in outsourcing, the business model would be in great demand going forward and considering all factors. “We recommend allotted investors to book 50 percent profits over and above Rs 1,400 and retain the rest of the holding for the long-term, considering healthy long-term returns after listing and for those investors who failed to get allotments in the public offer can accumulate Tata Technologies on every dip for the long term,” said Prashanth Tapse.
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Swastika Investmart: Hold
“The listing of Tata Technologies is a positive development for the company and the engineering services sector. Investors who participated in the IPO should consider holding on to their shares for the long term, as the company is well-positioned for sustained growth,” said Shivani Nyati, Head of Wealth, Swastika Investmart.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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