Should You Buy, Sell Or Hold Electronics Mart India After 50% Surge On Listing Day?

Electronics Mart India made a strong stock market debut on Monday. The stock opened for trading at Rs 89 on the BSE against issue price of Rs 59, marking an upside of 51 per cent from the IPO price. On the National Stock Exchange, Electronics Mart India opened for trading at Rs 90, marking an up move of 52 per cent from IPO price. The stock touched an intraday high of Rs 91.

Electronics Mart India shares were in very high demand during the three-day share sale via initial public offering (IPO) which ended on October 7 as the issue was subscribed nearly 72 times. Portion reserved for qualified institutional buyers (QIBs) was subscribed 62.28 times, shares set aside for non-institutional investors was subscribed 24 times and pie set aside for retail investors was subscribed 13 times.

50 per cent of the shares in the IPO were reserved for QIBs, 15 per cent for non-institutional investors and 35 per cent for retail investors.

The company raised Rs 500 crore from the IPO which was fresh issue of shares by selling shares in the price band of Rs 56-59. Retail investors were allowed to bid for one lot of 254 shares up to maximum of 13 lots. One lot of Electronics Mart India shares in the IPO was priced at Rs 14,986 at the upper end of the price band.

Should You Buy, Sell or Hold Electronics Mart India Shares After Bumper Listing?

The company’s strong listing can be attributed to strong interest from investors, reasonable valuations, and a sanguine growth outlook, said Pravesh Gour, senior technical analyst at brokerage firm Swastika Investmart . 

“The company is the fourth largest consumer durable and electronics retailer in India with a leadership position in South India having the majority of its stores in Telangana and Andhra Pradesh. The consumer durable and electronics industry in India is underpenetrated and has a long runway of growth. Nevertheless, the electronic and consumer durable market is extremely competitive and has been disrupted by e-commerce players,” Gour said. 

The company faces significant competition from players like Reliance Retail, Croma, etc. He advises investors to lock in listing gains and only aggressive investors should consider making a long-term commitment to the company. 

He adds that investors who bought for listing gains should maintain stop loss of Rs 77.