Vishal Mega Mart Ltd's stock is just two days old at exchanges. Yesterday, the company made a strong market debut. Its shares opened at Rs 110 on BSE, reflecting a 41 per cent premium over the issue price of Rs 78. They went on to climb further and eventually settled the maiden trading session at Rs 111.95 level.
The uptick was short-lived as the stock today slipped 6.96 per cent to hit an intraday low of Rs 114.70. At this price, Vishal Mega Mart shares were still trading 47.05 per cent higher compared to their issue price. A few analysts suggested that investors can consider booking some profits at current levels. "Those willing to hold the stock should keep a stop loss placed at Rs 95," one of them underscored. Fresh buying is advised on further dips.
"Despite a subdued market along with a 100 per cent offer for sale (OFS), Vishal Mega Mart listing was in line with market expectation. I believe retail investors missed this opportunity wherein they had shown less interest in bidding. Listing was justified as we believe it was all because of reasonable valuations when compared to its listed peers and high focus towards catering to India's growing middle- and lower-middle-income demographics which is strategically focused on underpenetrated markets," said Prashanth Tapse, Senior VP (Research) at Mehta Equities.
"Considering volatility in the market sentiments and all other parameters, allotted conservative investors can think of booking profits, while long-term risk taking investors can consider the company to 'HOLD IT FOR LONG TERM' despite knowing short term volatility and risks in the markets. For non-allotted investors, we advise accumulating it on further dips post-listing due to profit booking attempts," Tapse further stated.
"The company's position as a leading offline retailer, consistent financial performance, and reasonable valuation resonated well with investors. However, given that this was a complete offer for sale (OFS), there are no direct benefits to the company, making it a play purely on market sentiment and its growth story in the retail sector," said Shivani Nyati, Head of Wealth at Swastika Investmart Ltd.
Investors should consider booking profits at current levels, while those looking to hold should keep a stop loss placed at Rs 95, Nyati added.
"The IPO saw high demand, with institutional investors oversubscribing their reserved portion by 81 times, while the retail segment was oversubscribed 2.3 times. This solid performance highlights investor confidence in the company's future growth and its strategic position in India's retail market," said Bajaj Broking.
Incorporated in 2001, Gurugram-based Vishal Mega Mart is a hypermarket chain that sells a wide range of products such as apparel, groceries, electronics, and home essentials. They own their brands and third-party brands to meet the everyday needs of consumers including a wide range of products across apparel, general merchandise, and FMCG.
Meanwhile, Indian equity benchmarks continued their sharp fall for the fourth consecutive session as banks, financials, IT, consumer, metal and automobile stocks dragged.