DOMS Industries debuts with 77% premium: Should you buy, hold or book-profit?

Doms Industries IPO received an impressive response from investors as the issue was subscribed 93.52 times

The stock of DOMS Industries was listed at a premium of 77.2 percent over the IPO price on December 20. The shares opened at Rs 1,400 on the NSE and the BSE against an issue price of Rs 790, meeting analyst expectations on the back of strong subscription numbers and robust market momentum.

The IPO received an impressive response from investors as the issue was subscribed 93.52 times with investors buying 82.64 crore shares against an IPO size of 88.37 lakh. Retail investors bought 69.65 times the allotted quota, followed by high net-worth individuals, who picked up 66.51 times their reserved portion. The part set aside for qualified institutional buyers was booked 115.97 times.

Also read: DOMS Industries: A deep dive into its business, risk factors and whether you should invest

The price band for the IPO, which closed on December 15, was fixed at Rs 750-790 per share. The Gujarat-based company raised Rs 1,200 crore from the public issue, which consisted of a fresh issue of 44.3 lakh shares worth Rs 350 crore and an offer-for-sale of 1.07 crore shares worth Rs 850 crore by promoters FILA- Fabbrica Italiana Lapised Affini SpA, Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajan.

Should you buy, sell or hold DOMS stock?

Mehta Equities: Book profit

Prashanth Tapse, senior vice-president for research at Mehta Equities, believes after the listing, valuations would go over stretched discounting the next one-year earnings growth and recommend allotted investors to book profits while those investors who failed to get allotments in the public offer can wait and watch for reasonable dips to accumulate for decent long term returns.

Also Read: DOMS Industries lists at Rs 1400, over 77% premium over IPO price

Swastika Investmart: Book profit

Doms has demonstrated impressive financial growth in recent years, solidifying its market position and future potential. “The issue came at a P/E of 43x, which was fully priced. Thus, considering such a premium on listing, allottees who applied for the public offering for listing premium are advised to book profit. However, investors with long-term view may hold it by keeping a stoploss at Rs 1,260. A fresh buy will not be recommended at such a high level,” said Shivani Nyati, head of wealth at Swastika Investmart.

StoxBox: Book profit

DOMS has emerged as the second largest player in India’s branded stationery and art products market, with a market share of around 12 percent by value in FY23.

“Other notable advantages that DOMS Industries brings to the market, include market leadership, a strong brand presence, established international partnerships, and a foothold in the export market. However, at the current price and P/E multiple, we advise investors to book profits and subsequently consider investing in the company after evaluating its quarterly performance in the near term,” said Dhruv Mudaraddi, research analyst at Stoxbox.

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