Augmont makes strong debut

Augmont Enterprises made a strong debut on the BSE today, listing at Rs.956 against the IPO price of Rs.788, a premium of over 21%. The stock rose further to hit an intraday high of Rs.1,019 and is now trading at Rs.947.40, still around 20% above the issue price. Market depth shows buy quantity at 1.27 lakh against sell quantity of 59,789, indicating strong buying interest despite some cooling from the day’s high.

The IPO had met with a strong response, with overall subscription at 106x. QIBs led the demand with 227x subscription, followed by HNIs at 121x, Retail at 31x and Others at 21x. The strong institutional participation clearly helped support the listing premium.

Augmont Enterprises is a 14-year-old Mumbai-based bullion value-chain company engaged in gold and silver procurement, refining, bullion trading, digital gold offerings, jewellery manufacturing and facilitating gold-backed financial services. It has two gold refining facilities, at Mumbai and Uttarakhand, with aggregate capacity of 284 MTPA, and is authorised to deliver refined bullion to BSE and MCX.

In our IPO Analysis, we had concluded - Augmont Enterprises is a unique profitable gold platform business with healthy growth opportunity. Hence, we recommend the IPO for the long term.

The listing has reflected that optimism, though after the sharp premium and a market cap of around Rs.8,653 crore, the stock may now need earnings delivery and sustained traction in its bullion platform business to justify further upside.