The scrip was listed at Rs 90 on the National Stock Exchange, a discount of 24 per cent over its issue price of Rs 118. On the other hand, it made its debut at Rs 94 on BSE, 20 per cent below the issue price.
The counter made a quick recovery of 18 per cent to hit a high of Rs 106.40. However, the scrip was hovering around Rs 100 amidst the weakness in the market. The series of poor listings has kept the investors on their toes, who are unable to recover their investment and looking for an exit.
Vikas Jain, Senior Research Analysts, said that the listing was weaker on the expected lines, considering sell-off in the market and correction in reality index. However, one should avoid fresh buys in it.
“However, the counter has shown a strong recovery from the lower levels, and investors can hold the stock for the medium term,” he added. “The scrip is likely to recover to the issue price in next few sessions, giving an exit to the investors.”
The Shriram Properties IPO was open for subscription between December 8-10. The company sold its shares in the range of Rs 113-118 apiece during the three-day bidding process.
“Existing investors can continue to hold, keeping in mind the industry’s long-term growth prospects and Shriram’s strong brand presence and execution track record,” said Ajit Mishra, VP- Research, Religare Broking.
“Investors, who are willing to invest now, may consider investing in a staggered manner, considering the weak market trend,” he added.
A day ahead of its listing, shares of the south India-based real estate player were trading at a discount of Rs 10-15 in the grey market, signalling a muted listing.
Relatively poor investor demand and negative sentiment in the broader market mainly dented the listing performance, said Rajnath Yadav, Research Analyst, Choice Broking, suggesting investors hold the investment for a medium-term.
The company is among the leading residential real estate development companies in South India, with a presence in the South Indian markets of Bengaluru and Chennai, key residential housing markets in India.
Santosh Meena, Head of Research, Swastika Investmart, said that the IPO saw a muted demand on the back of losses where other real estate companies were booming in the last two years.
“In upcoming years, real estate is likely to perform better, and only aggressive investors are advised to look at Shriram Properties, while others can opt for Sobha, Prestige, or Brigade.”
“Investors who are aggressive in their investing can hold the stock for the long term while short-term investors should take a stop loss of Rs 80 on a closing basis,” he added.
It raised Rs 600 crore via the initial stake sale that included a fresh issue of Rs 250 crore and an offer for sale (OFS) worth Rs 350 crore. The company had trimmed the OFS size from Rs 550 crore, reducing the issue size.
Incorporated in 2000, Shriram Properties is a part of the Shriram Group and is one of the leading residential real estate development companies in South India. It primarily focuses on the mid-market and affordable housing segments.
“We do not advise investors who are wishingto add this stock at current levels as we expect further correction around 15 per cent in the coming sessions,” said Likhita Chepa, Senior Research Analyst at CapitalVia Global Research.
“Short term investors can avoid adding this stock to their portfolio at the current juncture,” she added with advice for the long term investors can consider buying this stock at Rs 75-80 levels.
“We had an avoid rating to Shriram Properties, and the listing was broadly in line with our expectations,” said Saurabh Joshi, Research Analyst at Marwadi Shares and Finance. Investors should avoid the stock even after a discount listing as both valuations and return ratios are not in favour of investors, he added.