It is raining rewards for investors who subscribed to some of the recent initial public offerings (IPO). After Indian Renewable Energy Development Agency (IREDA) made a strong debut on Wednesday, it was a blockbuster opening for Tata Technologies and Gandhar Oil Refinery on Thursday.
Tata Technologies, the first company from the Tata Group to list since Tata Consultancy Services went public back in 2004, listed at 140 per cent premium on the stock exchanges on Thursday. Compared to the issue price of Rs 500, the stock listed at Rs 1,199.95 on the BSE, which means lucky shareholders who got the allotment have seen their wealth more than double on listing day itself.
Elsewhere, Gandhar Oil Refinery also had a stellar debut on Thursday. The stock listed at Rs 295.40 on the BSE, a near 75 per cent premium to its issue price of Rs 169. It was a muted debut though for Fedbank Financial Services, which listed at a discount of 1.60 per cent.
On Wednesday, IREDA shares listed at Rs 50 a share, a 56 per cent premium to its issue price and eventually closed 87.50 per cent higher at Rs 59.99. Today, the stock was up another 10.8 per cent in afternoon trade at around Rs 66.49.
The public issues had seen a strong investor interest too. For instance, the issue of Tata Technologies, which was entirely an offer for sale for 6.08 crore shares from the promoters Tata Motors and existing investors - Alpha TC Holdings and Tata Capital Growth Fund I, was subscribed 69.43 times.
The Rs 2,150 crore public issue of state-owned financial institution IREDA had subscribed 38.80 times. The Rs 500.69 crore issue of white oil manufacturer Gandhar Oil Refinery had also been subscribed over 64 times.
On the bumper listing of Tata Tech, analysts say, the growth potential for the engineering technology services arm of Tata Motors is strong and therefore investors would be well suited to hold at least some of the shares from the long-term perspective.
"Given the growth potential in outsourcing, the business model would be in great demand going forward, and considering all factors, we recommend allotted investors book 50 per cent profits over and above Rs 1,400 and retain rest of the holding for long term," said Prashant Tapse, senior vice-president (research) at Mehta Equities.
Investors who failed to get allotment in the Tata Tech IPO could accumulate the shares on every dip, he added.
The Gandhar Oil IPO offered investors an opportunity to invest in the largest white oils company, which exports to over 100 countries, and the issue had been reasonably valued, he had said. White Oils are highly refined mineral oils and are used in a wide variety of applications across industries.
"Post listing, we believe the valuation gap has narrowed to Gandhar's peers and hence expect limited upside from the current levels," said Tapse.
The bumper listing of IREDA, Tata Tech and Gandhar Oil comes amid broader euphoria in capital markets aided by strong foreign investment flows. On Wednesday, the BSE Sensex had soared over 700 points and the combined market valuation of all the listed companies on BSE had topped $4 trillion. While the Sensex was down around 160 points in afternoon trading today, it is up over 4.3 per cent over the past month. The BSE MidCap and SmallCap indices have surged 9 per cent and 6.5 per cent in the same period.
Data from NSDL shows that after pulling out Rs 14,768 crore from Indian equity markets in September and Rs 24,548 crore in October, foreign portfolio investors have pumped in Rs 4,687 crore so far in November. Overall thus far in calendar year 2023, FPIs have invested Rs 100,658 crore in Indian equity market. In 2022, they had pulled out Rs 121,439 crore from stocks.
