Shares of Paradeep Phosphates gained over twelve percent on the issue price post listing with marginal gains on their debut on Friday. Soon after the listing, the counter surged around 12.42% to Rs 47.25 per share on the BSE. Shares of the fertilizer company were listed at Rs 43.55 per share, a premium of 3.69% on the upper end of the price band of the issue, on the BSE. The fertilizer company has kept the price band at Rs 39-42 per share for this IPO. Paradeep Phosphates shares opened at Rs 44 apiece, a gain of Rs 2 or 4.76% at the upper price band, on the NSE. 

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Listing of Shares of Paradeep Phosphates were largely on the lines of Zee Business Managing Editor and market experts, who have expected at par listing for the issue. Largely experts were of the view that ne should hold the shares with long-term views. They also believed that the tepid listing was largely due to current volatility in the market.  

What should investors do?  

Zee Business Managing Editor Anil Singhvi was of the view that the company has a strong growth prospect. "It boasts of a good financial track record and is a profit-making company. Besides, the issue was offered at reasonable valuations," he had said.   

The shares are expected to list a little above the issue price of Rs 42, Singhvi said in his pre-listing preview of the IPO.  "Long-term Investors should HOLD," he recommended.  

The company’s tepid listing can be attributed to the current market sentiments and a lukewarm response from the investors said Santosh Meena, Head of Research, Swastika Investmart Ltd. 

He said that the company is one of the largest manufacturers of non-urea-based fertilizers and has competitive advantages in terms of backward integration and location.  

"However, the company is operating in a highly regulated industry, with a very high dependency on the agriculture sector. The business is subject to climatic conditions and is cyclical in nature," said Meena.  

Nevertheless, the issue was reasonably priced and interested investors may accumulate the shares post listing for the long-term, suggested the expert.  "Those who applied for listing gains can maintain a stop loss of Rs.40," he added.  

A company with an established brand name, backed by an extensive sales and distribution network which has strong parentage, experienced management team and prominent shareholders is looking decent investment avenue for long term investment, said Hem Securities.  

The IPO had closed on the last day on May 19, 2022, with 1.75 times subscription. The portion reserved for retail investors was subscribed 1.37 per cent, the HNIs quota and QIBs portions received bids for 0.82 times and 3.01 times, respectively. 

The company aims to use the proceeds to partly finance the acquisition of the fertiliser manufacturing facility in Goa and payment of debt and general corporate purposes. 

At 1.45 pm, shares of India's second largest private sector manufacturer of non-urea fertilizers were trading with nearly six percent gains on issue price and higher by around two per cent on the listing price to Rs 44.45 per share in Friday's intraday trade on the BSE.