After a 53 per cent listing pop, short-term investors can look to book profits partially in Electronics Mart, said analysts, who believe investors who did not get Electronics Mart stock in the allotment process — but still wish to enter the counter — can look for an entry in the Rs 75-80 range. Existing investors with a good risk appetite can hold on to the stock for two-three years, analysts said.
Electronics Mart got listed at Rs 90 apiece on NSE, a 52.54 per cent premium over its issue price of Rs 59.
Astha Jain of Hem Securities said she was expecting the IPO to list at around 45 per cent premium, but the scrip debuted at Rs 90 on NSE, a 53 per cent premium. While Jain has a target of Rs 99 on the scrip, she felt one can book profit on 50 per cent of their holdings at Rs 89-90 level. This is even as she sees long-term potential in the consumer durables retailer.
Despite a strong listing, valuations for Electronics Mart do not look stretched, said Narottam Dharawat of Dharawat Securities, who added that long-term investors can still hold on to the stock for a two-three-year time horizon.
Watch : Electronics Mart IPO – Subscribe it or not
“For the ones who did not get an allotment and still want to enter the counter can look for levels of Rs 75-80,” he said.
Electronics Mart is India’s fourth largest consumer durable and electronics retailer, offering large appliances such as air conditioners, televisions, washing machines and refrigerators, mobiles and small appliances, IT and others. Its offering includes more than 6,000 stock-keeping units across product categories from more than 70 consumer durable and electronic brands.
Pravesh Gour of Swastika Investmart said Electronics Mart’s solid listing can be attributed to strong interest from investors, reasonable valuations, and a sanguine growth outlook. He advised investors to lock in listing gains and said only aggressive investors should consider making a long-term commitment to the company.
“Those who applied for listing gains can maintain a stop loss of Rs 77,” he said.
Gour said the consumer durables and electronics industry in India is underpenetrated and has a long runway of growth. That said, the industry is extremely competitive and has been disrupted by e-commerce players. Electronics Mart faces significant competition from players like Reliance Retail, Croma, etc.
The Rs 500 crore-IPO, which was sold from October 4 to October 7 in the Rs 56-59 price band, received 71.93 times bids. This was the second-highest for any IPO in 2022 so far.
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Harsha Engineers International’s IPO attracted the highest bid 74.70 times, followed by Dreamfolks Services (56.68 times) and Campus Activewear (51.75 times).
Harsha Engineers got listed on September 26 at a 36 per cent premium over its issue price of Rs 330. Dreamfolks Services saw a 56 per cent listing pop earlier that month. Campus Activewear had also jumped 23 per cent on its listing in May this year.
Electronics Mart received 4,49,53,64,644 bids against the issue size of 6,25,00,000 shares, with the QIB quota getting 169.54 times subscription. The quotas reserved for non-institutional investors (NIIs) and retail individual investors (RIIs) were subscribed 63.59 times and 19.71 times, respectively.