Investor attention was fixated on TVS Supply Chain Solutions, awaiting a blockbuster listing. However, disappointment swirled as the stock's debut wasn't as flashy as expected. But here's the question: Should you stick around or head for the exit? Let's dive into the details to help you make a sound decision.
The initial public offering (IPO) of TVS Supply Chain Solutions, offered at Rs 187-197 per share, witnessed an overall subscription of 2.85 times between August 10 and August 14.
Breaking away from the recent trend of exuberant debuts, TVS Supply Chain Solutions faced a tepid reception on its debut day. This TVS Group company took a modest step into Dalal Street, listing at a 5% premium—Rs 207.05 on the National Stock Exchange (NSE) and Rs 206.30 on the Bombay Stock Exchange (BSE)—in contrast to its issue price of Rs 197 per share.
Post-listing, the stock witnessed a spell of profit booking, causing it to hover within a range for the day. The stock ventured as high as Rs 208.50 and dipped to a low of Rs 199 during trading hours. This rather horizontal movement left investors pondering whether to stay put or exit, given the restrained listing excitement.
Amidst the divergence of opinions from analysts, a majority of them lean toward suggesting an exit. Their reasoning encompasses stretched valuations and the company's history of losses. Nevertheless, a few analysts advise those with a high risk appetite and long-term perspectives to hold onto the stock.
While TVS Supply Chain Solutions' IPO subscription fell short of recent benchmarks, the listing is considered a respectable debut. Despite being a prominent player in supply chain management, the company operates within a fiercely competitive landscape and has reported losses over the past two years.
Anubhuti Mishra, Equity Research Analyst at Swastika Investmart, emphasizes the importance of locking in profits following such elevated listing levels. For those who still wish to hold on, she recommends setting a stop loss at the IPO price to mitigate risks posed by the expensive valuations.
The IPO of TVS Supply Chain Solutions, valued at Rs 880 crore, was open for subscription from August 10 to August 14. The TVS Mobility Group company offered its shares in the price bracket of Rs 187-197, with a lot size of 76 equity shares during the three-day bidding process.
The IPO's primary stake sale was subscribed 2.85 times in total. The qualified institutional bidders' portion garnered a subscription of 1.37 times, while the non-institutional investors' category saw a subscription of 2.44 times. Retail investors displayed robust enthusiasm, subscribing 7.89 times their allocated quota.
Dhruv Mudaraddi, Research Analyst at StoxBox (formerly BP Equities), points out that the listing's tepid performance was anticipated. He attributes this to the company's relatively rich valuation, average financial performance, and increased competitive intensity within the industry.
Mudaraddi advises those who received allotment to explore other investment avenues in the short-term and steer clear of the stock. He suggests reconsidering TVS Supply Chain Solutions in the future, hinging on improved financial metrics and a reasonable valuation.
Chennai-based TVS Supply Chain Solutions specializes in supply chain management services for international organizations, government departments, and businesses of various sizes. Its services span integrated supply chain solutions and network solutions.
While the company boasts sound fundamentals and strong promoter support, experts believe in its future growth potential. Mahesh M Ojha, AVP – Research at Hensex Securities, encourages investors to stay the course for the long haul. For those eyeing listing gains, he suggests booking profits once the stock demonstrates a 10-15% return over the issue price.
Considering the varied perspectives, investors contemplating selling their allotted shares on the listing day may want to reconsider. Prashanth Tapse, Senior VP Research Analyst at Mehta Equities, points out that risk-takers could discover value in TVS Supply Chain's asset-light strategy, global services, and the post-GST surge potential for organized logistics.