Sell or Hold? Here's what you should do with Netweb Technologies shares after a strong listing pop

After debuting at a heavy premium of 90 per cent on its listing day on Thursday, shares of Netweb Technologies India made some profit booking during their maiden trading session, before making a recovery. However, the stock turned range-bound as the session progressed.

Shares of Netweb Technologies India made a stellar debut at Dalal Street on Thursday as the stock was listed at Rs 947 on the National Stock Exchange (NSE), a premium of 90 per cent, over its issue price of Rs 500. Similarly, the stock made its debut at a premium of 89 per cent at Rs 942.50 on the BSE.

Following the listing, shares of Netweb Technologies extended its gains to Rs 953, before falling 8 per cent to Rs 875.60 on BSE, thanks to the sharp profit booking in the counter. However, the stock saw buyers at lower levels and recovered to the Rs 930-935 range around 1.15 pm on Thursday.

Analysts suggest the investors should book partial profit to protect their wealth, while some portion can be held for the longer run, considering the strong business prospects for the company. However, aggressive investors can hold the entire allotment for a longer run.

Mahesh M Ojha, AVP Research and Business Development at Hensex Securities suggested investors to book partial profits on the listing day, while remaining can be held for a longer term.. "The company has great potential ahead and we suggest investors to book at least 50 per cent on the listing day itself, rest can be kept for medium to long term investment," he said.

Netweb Technologies India opened its trading window with an astounding premium. The company being one of India’s leading HCS providers and operating in a rapidly evolving and technologically advanced industry with high entry barrier, investors have shown great faith in the company, he added.

The Rs 631-crore initial public offering of Netweb Technologies, a high-end computing solution (HCS) provider, had received a robust strong response from the investors. The primary stake sale of Netweb Technologies, which was sold in the range of Rs 475-500 apiece, between July 17-19. The issue was overall subscribed 90.55 times, thanks to its niche business model.

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The bidding was led by qualified institutional bidders (QIBs), whose quota was booked 220.69 times, highest in the category in the last one decade. The portions for non-institutional bidders (NIIs), retail investors and employees were booked 83.21 times, 19.48 times and 55.92 times, respectively.

The strong listing was in line with expectations. IT has a strong track record of growth and its financial performance has been improving in recent years. Netweb Technologies is well-positioned to benefit from the growth of the high-end computing market, as it has a strong focus on the niche business segment, said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.

"After listing at such a level, we will suggest to hold as of now with a stop-loss at around Rs 850. However, aggressive investors can still choose to buy during any subsequent dip," she said.

Incorporated in 1999, Netweb Technologies provides high-end computing solutions (HCS), offering high-performance computing (supercomputing/HPC) systems; private cloud and hyper-converged infrastructure (HCI); AI systems and enterprise workstations; high-performance storage solutions; data center servers, software and services.
 
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