Should you buy the shares of Shriram Properties? Here’s what brokerages say

South India-based real estate player Shriram Properties witnessed a tepid debut on bourses on Monday with a discount of 23.73 per cent. The scrip listed at Rs 90 on the NSE against the issue price of Rs 118. On the other hand, it got listed at Rs 94 on the National Stock Exchange (NSE).

The initial public offering, which opened for subscription on December 8, was oversubscribed by 4.60 times on the last day of the bidding process on December 10.

Post tepid listing, Santosh Meena, head of research, Swastika Investmart said, “Only aggressive investors are advised to look at Shriram Properties, while others can opt for Sobha, Prestige, or Brigade. Investors who are aggressive in their investing can hold the stock for the long term while short-term investors should take a stop loss of Rs 80 on a closing basis.”

The company is primarily focused on the mid-market and affordable housing categories. Shriram Properties is among the top five residential real estate companies in South India in terms of the number of units launched between the calendar years 2012 and the third quarter of 2021 across tier 1 cities of South India including Bengaluru, Chennai and Hyderabad. They are also present in the mid-market premium and luxury housing categories as well as commercial and office space categories in their core markets.

Ajit Mishra, VP-research, Religare Broking said, “Existing investors can continue to hold, keeping in mind the industry’s long-term growth prospects and Shriram’s strong brand presence and execution track record. Investors, who are willing to invest now, may consider investing in a staggered manner, considering the market trend.”

Shriram Properties are part of the Shriram Group, which is a prominent business group with four decades of operating history in India and a well-recognised brand in the retail financial services sector and several other industries.

Likhita Chepa, senior research analyst, CapitalVia Global Research said, “Shriram Properties got listed at a discount due to ongoing weaker market sentiments despite the issue being fairly valued. Considering the volatility in the market, we do not advise investors to add this stock at current levels as we expect further correction around 15 per cent in the coming sessions.”

“With the US Fed planning to increase the pace of bond purchases, we expect foreign institutional investors to pull out their money in the coming months due to which high beta sectors like infrastructure and realty might witness some selling pressure. Therefore, short term investors can avoid adding this stock at present. Long term investors can consider buying this stock at Rs 75-80 levels,” she added.

On the other hand, shares of Shriram Properties traded 14 per cent higher at Rs 102.70 at around 10.45 am (IST) against the list price. The benchmark BSE Sensex was down nearly 1,200 points at around the same time.

Vikas Jain, senior research analyst, Reliance Securities added that the company witnessed weak listing on the back of broader market weakness, but Shriram Properties has witnessed some up move from its listing price. It can witness some upward momentum near Rs 115-118 levels.

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