Shares of Allied Blenders and Distillers Ltd traded range-bound after a decent listing pop at the bourses on Tuesday. The stock gave up some gains initially but again rebounded from the lower levels to hit highs but mostly hovered near the issue price in its maiden trading session.
Shares of Allied Blenders and Distillers made a decent Dalal Street debut as the stock was listed at Rs 320 on NSE, a premium of 13.88 per cent and at Rs 318.10 on BSE, a premium of 13.20 per cent over the issue price of Rs 281 per share. However, the listing pop fell short of the expectations.
Post listing the stock touched the lows of Rs 306.70, dwarfing the overall gains to merely nine per cent over the issue price. On the upside, the stock scaled at Rs 324.40-mark, signaling gains of 15.44 per cent over the IPO price. However, the stock was mostly around Rs 310-315 levels for the day.
Brokerage firms are not very positive on the stock as they suggest investors to book profit after decent gains on the back of aggressive valuations. On the other hand, a few analysts suggested investors with strong risk appetite to hold the stock for a longer but protect their capital from erosion.
Shares of Allied Blenders and Distillers listed on the bourses on Tuesday with a premium of about 14 per cent over the issue price. Apart from being one of the largest Indian Owned-India Made Foreign Liquor (IMFL) companies offering a broad range of alcoholic beverages, said Parth Shah, Research Analyst at StoxBox.
"Due to internal practices and the promising macro situation, the company is set to experience growth in the coming period. However, as the issue seems to be expensive on the valuation front, we would advise the market participants who have been allotted the shares to book profits," he said.
Allied Blenders and Distillers sold its IPO in a fixed price band of Rs 267-281 per share, with a lot size of 53 shares. The primary offering was open for bidding from June 25 to June 27. The Mumbai-based company raised Rs 1,500 crore through this primary offering, which included a fresh share sale worth Rs 1,000 crore and an offer-for-sale (OFS) of up to 1,77,93,594 shares.
Amit Goel, Co-Founder & Chief Global Strategist at Pace 360 advised that investors should book profits. "We suggest investors stay away from long term investment in this stock. However, in the shorter term, it might remain range bound," he said.
The issue was oversubscribed to a total of 23.55 times overall. The quota for qualified institutional bidders (QIBs) was booked a strong 50.37 times, while the non-institutional investors' quota was subscribed 32.40 times. The portions reserved for retail investors and employees saw bidding of 4.51 times and 9.89 times, respectively, during the three-day bidding process.
Allied Blenders and Distillers debuted at Rs 320 per share but falling short of pre-listing expectations that likely anticipated a higher premium due to the good investor response. The stock price has further declined since the listing, adding to the cautious investor sentiment, said Shivani Nyati, Head of Wealth, Swastika Investmart.
"The listing price fell short of pre-listing expectations, possibly due to the high IPO valuation or concerns about the company's financial health and competitive industry landscape. The listing was positive but did not match the pre-listing hype. Investors who want to hold their position may keep a stop loss at the issue price," she suggested.
Incorporated in 2008, Allied Blenders and Distillers is an Indian-made foreign liquor (IMFL) company. The company offers five categories of Indian-made foreign liquor: whisky, brandy, rum, vodka, and gin. ICICI Securities, Nuvama Wealth Management and ITI Capital are the book running lead managers of the Allied Blenders IPO, while Link Intime India is the registrar for it.