There were two listings today and made a fantastic debut, which seems to have become the norm now.
Chemcon Specialty Chemicals, as against the IPO price of Rs.340, got listed on the BSE at Rs.730.95, which is a jaw-dropping premium of 115%.
It was expected to have a fantastic listing as the IPO was subscribed 140 times, with HNIs picking up the biggest chunk, subscribing over 450 times, followed by institutional investors at 113 times. Retail too was extremely robust at 40.4 times.
But be warned. Our New Issue Analysis concluded, “Potential corporate governance issues with the promoter group is a red flag. On the other hand, market leader increasing capacity, high margin business, low equity, supported by healthy demand tailwinds in pharma chemicals make the issue attractive over short-to-medium term. However, long term may not be as attractive on valuation. Thus, one can apply with a short-to-medium term outlook, but it may not qualify as a portfolio pick.”
The other listing was of Computer Age Management Services (CAMS). As against the IPO price of Rs.1230, the stock got listed on the BSE at Rs.1518, premium of 23%.
This issue too had got a great response, led once again by HNIs. The offering was subscribed almost 47 times, HNIs portion getting subscribed 111.85 times, institutional investors by 73.18 times and retail was relatively subdued at 5.44 times.
In our New Issue Analysis, we had concluded, “While CAMS is a unique play on financial services and an alternate to AMC to ride the financialisation theme, pricing is very aggressive leaving limited scope for short term gains. Those with a long term view may wait for an attractive entry price post listing, as it qualifies as a quality mid-cap.”