What should investors do with Paras Defence shares post bumper listing? See what experts say about the company

The shares of Paras Defence and Space Technologies made a spectacular start on the exchanges on Friday. However, the question is what next? It’s indeed obvious the unusual business model makes it more lucrative, but the question remains the same, should you subscribe? The analysts clear the doubt post premium listing.

TradeSmart Chairman Vijay Singhania said, “Paras Defence is a leader in the defence and space equipments space. The company secured maximum subscription for its IPO, probably the most by any company in the past several years.”

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Singhania says, “We have not seen the interest rate of 3.8 per cent per annum for corporate Fixed Deposits. FIIs (foreign institutional investors) are still bullish and pouring funds in the market, despite the warning of stimulus tapering by the FED."

Similarly, Choice Broking Research Analyst Rajnath Yadav said, “Paras Defence has a niche product profile and technology and a dominant market positioning catering to the space and defence sector." 

“It is one of the leading ‘Indigenously Designed Developed and Manufactured’ category private sector companies in India and anticipated to benefit from the government’s flagship programs like Atmanirbhar Bharat and Make in India,” Yadav further said, adding that the fundamentals of the company are positive and can be a good bet in the medium term.

On the technical front, Marwadi Shares and Finance Limited in its note says, “Considering the FY-21 adjusted EPS of Rs.4.05 on the post-issue basis, the company is going to list at a P/E of 43.23 with a market cap of Rs.682.5 crore.”

It mentions, there are no listed entities in India whose business portfolio is comparable with that of Paras Defence’s business. The company offer a wide range of products and solutions for both defense and space applications and is well-positioned to benefit from the government’s initiatives.

Paras Defence shares got listed around 170 per cent higher premium at Rs 475 per share on the BSE and Rs 469 per share on the NSE, as compared to its issue price of Rs 175 per share at the upper end.

The counter made a 52-week high of Rs 498.75 per share on the BSE and Rs 492.5 per share on the NSE, while it touched Rs 456 per share on the BSE and Rs 460 per share on the NSE as 52-week low while starting its stock market journey today.