Motisons Jewellers lists at 89 percent premium, while Suraj and Muthoot have a weak debut on the bourses.
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It has been a lukewarm day for investors of Suraj Estates and Muthoot Microfin after the companies made a rather weak debut on the bourses, trading at a discount of over 8 and 4 percent, respectively.
Meanwhile, investors cheered Motisons Jewellers after the stock made a stellar debut, commanding an 88 percent premium over the issue price of Rs 55.
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In the afternoon trade, Muthoot Microfin was trading at a discount of 8.5 percent at Rs 259 over the issue price of Rs 291. On the other hand, Mumbai-based Suraj Estate Developers were traded lower by 4.5 percent at Rs 346 over the issue price of Rs 360.
What should investors who received the allotment do? Here's what analysts recommend.
Despite Suraj's weak debut, Prathmesh Masdekar of Stoxbox is optimistic about the stock and recommends investors who have received allotment to hold shares from a medium to long-term perspective. This is because the company has a track record of sustained consolidated revenue from operations, growing at a CAGR of 13 percent during the FY21-23 period. Their strong presence in the South-Central Mumbai region has generated significant brand recall in sub-markets and substantial sales referrals from existing customers.
The real estate developer will make use of net fresh issue proceeds for repaying debts amounting to Rs 285 crore, and Rs 35 crore will be utilised for the acquisition of land or land development rights in the Mumbai Metropolitan Region. The remaining fresh issue money will be set aside for general corporate purposes.
"Suraj Estate Developers presents a viable hold opportunity for medium to long-term investors, backed by steady growth and its niche in regulation," Suman Bannerjee, CIO, of Hedonova, an alternate investment fund said.
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Masdekar also has maintained a positive stance on Muthoot Microfin irrespective of the counter trading at a discount. "The lender has a well-diversified funding profile that underpins its liquidity management system, credit rating, and brand equity. As the lender will utilize the net proceeds of the fresh equity shares issue to augment its Tier-I capital base, its capital adequacy will enhance and lead to a stable leverage position", the analyst added. He advises investors to hold their shares from a medium to long-term perspective as they are fairly valued at the current P/BV multiple of 2.3 times the H1FY24 annualised book value.
Hedonova states that Muthoot appears to be a solid choice for longer-term investments, with its focused approach to rural microfinance, efficient management of NPAs, and fair valuation based on FY24 earnings expectations.
Motisons Jewellers, a pearl, silver, and gold jewellery retailer, has not only garnered handsome listing gains at the debut but has also caught the eye of analysts. "We believe the strong listing can be attributed to the distinct advantages that Motisons possesses a well-established brand and business that seamlessly blends. It has a vast product portfolio which caters to diverse market segments and strategically located showrooms that contribute to enhanced revenue per square foot", Dhruv Mudaraddi, Research Analyst, Stoxbox said.
MJL has demonstrated robust revenue growth over the last three years, with a notable doubling of net profit in the past two years. This surge in profitability is indicative of the company's effective positioning in the organized jewellery market in India and its stronghold in Rajasthan. "At the current juncture, we advise investors who have received allotment to book profits", Mudaraddi further added.
Bannerjee added that although launching at a premium, the counter seems to warrant caution given its challenges such as underperformance and dependence on third-party suppliers.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
