Shares of Northern Arc Capital Ltd, Western Carriers (India) Ltd and Arkade Developers Ltd fell in Tuesday's debut trade after listing. Post a decent first appearance, Northern Arc's stock declined 12.21 per cent from its day-high value of Rs 351 to hit a low of Rs 308.15. Despite the mentioned drop, it was still up 17.17 per cent from its initial public offering (IPO) price of Rs 263.
Two out of three analysts suggested that investors can consider booking profits. "Northern Arc, which offers retail loans to underserved households and businesses, made a good debut on the stock market at Rs 351 per share, a substantial 33 per cent premium over its issue price of Rs 263. The company has shown growth in top and bottom lines, negative cash flow and a high debt-to-equity ratio are areas of concern. Investors may consider booking part profit here, and those who want to hold it for the long term may keep a stop loss of the issue price," said Shivani Nyati, Head of Wealth at Swastika Investmart.
Prathamesh P Masdekar, Research Analyst at StoxBox, also recommended to book profit. "Investors who have been allotted shares are advised to book profits and exit their positions for the time being. We will reassess our recommendation if the company's financial situation shows signs of improvement in the future, Masdekar stated.
In contrast, Prashanth Tapse, Senior VP (Research) at Mehta Equities, said one can hold on to the stock. "We continue to believe that investors should continue to hold Northern Arc is well-positioned for a sustained growth in the long term with company's strong sectoral focus on MSME, microfinance, and consumer finance. Hence, we believe the market could give it a premium multiple for its leadership position which may result in the company delivering a healthy post listing," Tapse mentioned.
In the case of Western Carriers, the stock touched a day high of Rs 177 after listing at a discount of 1 per cent, at Rs 170, against its issue price of Rs 172. Last checked, it was down 8.14 per cent from the mentioned day high level to a low of Rs 162.60.
Analysts said market participants can hold the counter. "Western Carriers made a subdued debut. The company has exhibited slow but consistent financial growth with a positive trajectory. The company faces a long payment cycle and is exposed to several operational risks. Despite a good subscription of 31 times, the listing's lack of premium indicates a cautious approach from investors. Investors who participated in the IPO may consider holding their shares while closely monitoring the company's performance and market conditions. Short-term traders may hold with the stop loss of Rs 155-160 and others may hold for the long term," said Shivani Nyati of Swastika Investmart.
"The company is well-positioned for sustained growth. Despite the initial discounted listing, we remain optimistic about Western Carriers and recommend investors to hold the shares for a medium to long-term perspective," said Akriti Mehrotra, Research Analyst at Stoxbox.
On the other hand, Arkade Developers also made a strong market debut like Northern Arc, listing with a premium of 37.42 per cent at Rs 175.90 compared to its issue price of Rs 128. The stock went on to hit a further high of Rs 190. Later, it tumbled 12.97 per cent from the day's high level to touch a low of Rs 165.35.
An analyst said investors may consider taking some profit out of the table. "Overall, Arkade Developers Limited made a strong listing debut reflecting investor confidence in the company's growth potential and financial stability. Investors may consider booking part profit here, and those who want to hold it for the long term may keep a stop loss of the issue price," Nyati from Swastika stated.
"Those who have been allotted shares are advised to book profits and exit their positions for the time being. We will reassess our recommendation if the company's financial situation shows signs of improvement in the future," said Sagar Shetty, Research Analyst at StoxBox.