Rishabh Instruments may list at 12% premium over IPO price; should you hold the stock?

Rishabh Instruments may list at 12% premium over IPO price; should you hold the stock?

Rishabh Instruments, a company scheduled for listing on the stock exchanges on September 11, has garnered significant attention from experts and analysts. They anticipate that the stock will debut on the market with a substantial premium over its issue price of Rs 441 per share, primarily driven by the company’s robust revenues from its export business.

Analysts are projecting that the listing price for Rishabh Instruments could be around Rs 500 per share, marking a noteworthy 12 percent premium over the issue price. This optimistic projection is indicative of the market’s confidence in the company’s financial performance and growth potential.

In the grey market, where shares of upcoming IPOs are traded unofficially, Rishabh Instruments has already been trading at an even higher premium of 15 percent over the issue price. This enthusiastic demand for the stock in the grey market underscores the strong investor sentiment and interest surrounding the company’s initial public offering.

The premium in the grey market often reflects the level of anticipation and demand for an IPO, providing a preliminary indication of the stock’s potential performance upon listing. However, it’s important to note that grey market prices are unofficial and speculative, and the actual listing price on the stock exchanges may differ.

Rishabh Instruments’ expected strong debut on the bourses is a testament to the company’s financial health and its attractiveness to investors, particularly due to its thriving export business. The listing event will be closely watched by market participants and investors, as it will reveal the market’s response to the company’s IPO and provide insights into the current investment landscape.

The strong subscription of Rishabh Instruments’ initial public offering (IPO), with an oversubscription of 31.65 times on the final day of bidding, has garnered significant attention in the market. Investors showed great interest, with bids received for 24.65 crore equity shares against the offering size of 77.9 lakh shares.

Given the robust subscription demand and the overall positive market sentiment, experts like Prashant Tapse, Senior VP of Research at Mehta Equities, anticipate a substantial listing gain for Rishabh Instruments. They project that the stock could debut with a 12-15 percent premium over the issue price, potentially reaching around Rs 500 per share compared to the IPO price of Rs 441.

One of the key factors contributing to the positive outlook for Rishabh Instruments is its strong export-oriented business, with approximately 66 percent of its revenue derived from exports. Additionally, the company has established itself as a reputable brand in niche product segments. These factors, coupled with the optimistic market conditions, are expected to drive the stock’s performance upon listing.

Tapse also notes that conservative investors who were allotted shares during the IPO may consider booking profits upon listing, given the anticipated listing gain. This is a common strategy for investors to realize short-term gains on IPO investments when there is significant demand and potential for a premium listing price.

Overall, the positive response to Rishabh Instruments’ IPO and the favorable market sentiment suggest that the company’s debut on the stock exchanges is eagerly anticipated. The listing event will serve as a barometer of market sentiment and provide insights into investor confidence in the company’s business prospects and growth potential.

Rishabh Instruments, backed by a substantial oversubscription of approximately 32 times during its initial public offering (IPO) and a favorable market sentiment, is poised to make its stock market debut with a projected premium of around 15 percent over the issue price. This positive outlook has been shared by Parth Shah, a Research Analyst at StoxBox, reflecting the optimism surrounding the company’s prospects.

While the listing with a premium is anticipated, analysts are advising investors who have received IPO allotments to consider booking profits on the day of listing. This advice is rooted in the potential for short-term gains due to the expected listing premium. Investors often adopt this strategy to lock in profits when there is substantial demand for newly listed shares.

The IPO consisted of a fresh issue of Rs 75 crore worth of 17 lakh shares and an offer for sale of Rs 415 crore worth of 9.4 lakh shares. This combination of a fresh issue and an offer for sale allowed existing shareholders to partially exit their positions while also raising fresh capital for the company.

Rishabh Instruments operates as a global energy efficiency solutions provider, with a core focus on electrical automation, metering, measurement, and precision-engineered products. Its customer base spans multiple sectors, including power, automotive, and industrial, and the company operates through five manufacturing facilities.

As the company prepares to enter the stock market, its strong oversubscription and market enthusiasm signal positive initial momentum. Investors are advised to closely monitor the company’s financial performance in the subsequent quarters to make informed investment decisions, considering both short-term gains and long-term growth prospects.