Electronics Mart India: Should you book profits after stellar debut or hold it for long-run?

The shares of the company got listed at a premium of 53 per cent on National Stock Exchange (NSE) at Rs 90, over the issue price of Rs 59. On BSE, the scrip debuted at Rs 89.40 on BSE, a premium close to 52 per cent.

Following the listing, the counter failed to register further upside as investors, who received the shares during IPO bidding, booked profits after a hefty listing pop.

Shares of Electronics Mart India jumped to Rs 91 before dropping to Rs 83.25 on BSE, its intra-day lows till 11.45 am. Market analysts remain divided about any immediate move over the listing price. They unanimously suggest to avoid making a fresh entry on the counter.

Pravesh Gour, Senior Technical Analyst,

advised investors to lock in listing gains, and said only aggressive investors should consider making a long-term commitment to the company.

Those who applied for listing gains can maintain a stop loss of Rs 77, he said, adding that the company is operating in a highly competitive market with a limited market share.

Electronics Mart India raised Rs 755 crore via its initial stake sale, which remained open for subscription between October 4-7. The company sold its shares in the range of Rs 56-59 apiece.

The issue was overall subscribed 71.93 times, with the quota for QIB investors fetching a whopping 169.54 times subscription. Portions for HNI and retailers were subscribed 63.59 times and 19.72 times, respectively.

Astha Jain, Senior Research Analyst at Hem Securities suggested investors to book 25-50 per cent profits in the company and hold the remaining stake for the longer-term.

“The company has delivered returns on the expected lines, but one should take some money off the table,” she said. “At the current levels, new entries should be avoided.”

Echoing similar opinion, Arafat Saiyed, Research Analyst,

Securities said that the investors can book half of the profits and keep the remaining portion for further upside.

“After a stellar debut on the bourses, a fresh entry is not advisable. One should wait for a decent correction to enter the counter,” he suggested.

Incorporated in 1980, Electronics Mart India is the fourth largest consumer durable and electronics retailer in India with a leadership position in South India, particularly in the states of Telangana and Andhra Pradesh.

Electronics Mart India operates and manages 112 stores with a retail business area of 1.12 million square feet, located across 36 cities.

Harshit Kapadia from Elara Capital has suggested investors to keep the stock for a longer run. “One can hold the stock as there is more steam left in the counter but a fresh entry must be avoided.”

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