Senco Gold shares: Is it time to book profit after a strong D-St debut?

Shares of Senco Gold, which made a solid debut at Dalal Street on Friday, saw sharp profit booking at higher levels during the maiden trading. The stock spent the first half of the trading session mostly below the issue price as investors took the gains off the table.

Shares of Senco Gold were listed at Rs 431 on the BSE, a premium of 36 per cent against its issue price of Rs 317 apiece, while stock made its debut at same premium at Rs 430 on the National Stock Exchange (NSE). The stock delivered a handsome listing gain to the investors.

However, just after the strong listing, shares of Senco saw some buying interest as the stock rose about another 3 per cent to Rs 443.80 taking the overall gains to exactly to 40 per cent over the given issue price. Though, it corrected around 8 per cent to Rs 408.90 on the back of profit booking but hovered around Rs 415 at 12.45 pm.

The limited or range-bound trade in the counter after listing has led to confusion among the investors who boggled if they should book the profits and take money off the table or is more upside left in the stock. Also, those who did not get the allotment wondered if there was still room for entry in the counter.

Majority of the analysts continue to remain positive on the stock in the longer run but suggested not to buy the stock at current levels. However, they advised investors to enter the stock at lower levels with a long-term perspective. A few recommended to book profit in the stock, fully or partially, around listing price.

Mahesh M Ojha, AVP Research at Hensex Securities said that blockbuster listing performances from all the IPO lined up this month have been an icing on the cake. The stock was listed at a premium of 36 per cent and we suggest investors to book 100 per cent profits at these levels. One can re-enter in lower levels around Rs 360-375, he said.

"We believe the company has great potential for growth; it has the widest geographical footprint in non-eastern states and also undertakes wholesale exports of their jewelry primarily to Dubai, Malaysia and Singapore," Ojha added.

Senco Gold, a pan-India jewelry retailer, raised Rs 405-crore from primary markets, which was overall subscribed 77.25 times during the three-day bidding process. The issue was open for subscription between July 4-6 in the price range of Rs 301-317 per share.

Senco Gold IPO made a strong debut on the stock exchanges today, listing at Rs 430 per share. The strong listing was in line with the expectations. Senco Gold is a pan-India jewelry retailer with a strong brand presence, said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.

"The company has been growing steadily in recent years and is well-positioned to benefit from the growing demand for gold jewelry in India. We are not recommending any fresh buying at this level. However, existing investors can hold the shares for the long term with a stop loss at Rs 387, as the company has good growth prospects," he added.

Incorporated in 1994, Senco Gold is a pan-India jewelry retailer, which sells its products under its brand name 'Senco Gold & Diamonds' through its 136 showrooms across 96 cities and towns in 13 states throughout the country. It is the largest organized jewelry retailer in eastern India in terms of number of stores.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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