Mukka Proteins shares hit upper circuit after listing; should you hold or exit the stock?

Shares of Mukka Proteins Ltd made a less-than-expected debut at Dalal Street but listing of the company is said to be on a strong ground. However, the stock was locked in the upper circuit for the day, after hitting lower circuit for the session to maintain the equilibrium of the prices on both the exchanges.

Shares of Mukka Proteins were listed at a premium of about 57 per cent at Rs 44 on BSE and a premium of 43 per cent at Rs 40 on NSE, over the issue price of Rs 28. However, the stock hit lower circuit of BSE initially to Rs 38.24, before recovering to Rs 42.26, locked in the upper circuit on both exchanges as prices moved in the equilibrium on both the bourses.

By virtue of being in the 'T' segment on both exchanges, Mukka Proteins shares come with the upper and lower circuit limits of 5 per cent for the first 10 days. Also, intraday trading in the stock is not possible and traders need to have delivery of the stock to sell it.

Investors who received the allotment are not willing to exit the counter, while others are looking to enter the stock. Even the analysts tracking the counter are positive on the stock and suggest holding it for the long-term. They even suggest new investors may enter the stock at current or lower levels.

Shivani Nyati, Head of Wealth at Swastika Investmart said that Mukka Proteins listed at 43 per cent premium over its issue price, marking a positive listing. "However, this performance falls short of pre-listing expectations, which likely envisioned a higher gain based on the company's potential," she said.

Mukka Protein's listing, while not exceeding expectations, presents a good opportunity for investors seeking exposure to the fish protein sector. But existing investors who want to book listing gains may exit their holdings; however, investors with a long-term view are advised to hold their share by keeping a stop loss at Rs 35, she added.

Mukka Proteins sold its IPO in the price band of Rs 26-28 per share with a lot size of 535 equity shares. The issue could be subscribed between February 29 and March 04. The company raised a total of Rs 224 crore through its primary offering, which was entirely a fresh share sale of up to 8,00,00,000 equity shares.

The issue was overall subscribed a stellar 137 times, thanks to solid buying interest from all categories of investors. The quota for non-institutional bidders saw bidding for 250.26 times while the portion reserved for qualified institutional investors was subscribed 189.28 times. The allocation for retail investors was booked 58.36 times during the three-day bidding.

Mukka Proteins debuted at a healthy premium as the company holds a dominant position in the fish protein industry in India. It offers a wide range of fish protein products, including fish meal, fish oil, and fish soluble paste, catering to various sectors, said Dhruv Mudaraddi, Research Analyst at Stoxbox.

"High entry barriers, consistent financial performance, and innovative products have helped the company successfully grow its business. As we advance, Mukka Proteins Ltd. presents a persuasive investment opportunity in the fish protein industry, given its strong market position, diversified product portfolio, and global presence," he added, suggesting investors to hold it for the long term.

Mukka Proteins was incorporated in March 2003 and it specializes in the production of fish protein products. The company manufactures and delivers fish meal, fish oil, and fish soluble paste, crucial components for aqua feed used in fish and shrimp farming, as well as poultry feed for broilers and layers, and pet food for dogs and cats.

In an interview with Business Today TV (BT Bazaar), Independent market expert Raghvendra Singh said that investors who have received the allocation should hold the stock with a stop loss of 10-15 per cent and avoid booking profit in the stock. "One can enter the stock at current levels as more steam is left in the stock," he said.